Annual Report 2009 Report Annual . n.v fugro

ANNUAL REPORT 2009 FUGRO N.V. Colophon

Fugro N.V. Veurse Achterweg 10 2264 SG Leidschendam The Netherlands Telephone: +31 (0)70 3111422 Fax: +31 (0)70 3202703

Concept and realisation: C&F Report Amsterdam B.V.

Photography and images: Fugro N.V.

Fugro has endeavoured to fulfil all legal requirements related to copyright. Anyone who, despite this, is of the opinion that other copyright regulations could be applicable should contact Fugro.

This annual report is a translation of the official report published in the Dutch language.

This annual report is also available on www.fugro.com.

For complete information, see www.fugro.com.

Fugro N.V. Veurse Achterweg 10 P.O. Box 41 Cautionary Statement regarding Forward-Looking Statements 2260 AA Leidschendam This annual report may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including The Netherlands (but not limited to) statements expressing or implying Fugro N.V.’s beliefs, expectations, intentions, forecasts, estimates or predictions (and the Telephone: +31 (0)70 3111422 assumptions underlying them). Forward-looking statements necessarily involve risks and uncertainties. The actual future results and situations Fax: +31 (0)70 3202703 may therefore differ materially from those expressed or implied in any forward-looking statements. Such differences may be caused by various E-mail: [email protected] factors (including, but not limited to, developments in the oil and gas industry and related markets, currency risks and unexpected operational www.fugro.com setbacks). Any forward-looking statements contained in this annual report are based on information currently available to Fugro N.V.’s manage- Trade Register number 27120091 ment. Fugro N.V. assumes no obligation to make a public announcement in each case where there are changes in information related to, VAT number 00 56 21 409 B01 or if there are otherwise changes or developments in respect of, the forward-looking statements in this annual report. Contents

■ Preface from the President ■ Annual Accounts 2009 79 and Chief Executive Officer 2 1 Consolidated statement of comprehensive income 80

■ Fugro at a glance 3 2 Consolidated statement of financial position 82 Major developments in 2009 3 Key figures 4 3 Consolidated statement of changes in equity 83 Mission and profile 6 Fugro’s activities 7 4 Consolidated statement of cash flows 85 Financial targets and strategy 8 Information for shareholders 10 5 Notes to the consolidated financial statements 87

■ Report of the Supervisory Board 15 6 Subsidiaries and investments of Fugro N.V. accounted for using the equity method 145 ■ Report of the Board of Management 21 General 21 7 Company balance sheet 148 Acquisitions 21 Capacity planning 23 8 Company income statement 149 Financial 24 Dividend proposal 28 9 Notes to the company financial statements 150 Market developments and trends 29 Backlog 30 10 Other information 155 Postbalance sheet date events 31 Outlook 31 Report of Stichting Administratiekantoor Fugro Important and interesting contracts 34 (‘Trust Office’) 158 Geotechnical division 36 Historical review 160 Survey division 38 Glossary 162 Geoscience division 40

■ Theme: Wide spectrum of services 43

■ General information 56 Corporate Social Responsibility (CSR) 56 Health, Safety and Environment (HSE) 63 Information and Communication Technology (ICT) 64 Research and development 64

■ Risk management 65

■ Corporate governance 70

Annual Report 2009 ■ Preface from the President and Chief Executive Officer

Dear shareholders and other stakeholders, Looking to the future, we see some trends in the market which may indicate that the worst is likely to be behind As a result of the economic recession caused by the us, but some further hurdles will undoubtedly be met on financial crisis the market circumstances have drastically the way to a world wide recovery. With the recovery in the changed over a very short time. In the past year this has price of oil (to approximately USD 75 per barrel) the oil manifested itself in a decrease in spending by our clients. and gas sector, which is very important for Fugro, should After several years of shortages in capacity, resources are now have some room to invest in exploration activity and now underutilised in several market sectors and in production capacity for the future. With a further consequently putting pressure on prices. recovery of the world economy, other sectors in which we are active should also be able to resume growth. We have responded to this with cost savings and by realigning capacity, for example by releasing some Having taken the necessary measures in the past year, chartered vessels. Unfortunately, it has also been Fugro is well positioned to successfully continue its necessary to reduce the number of staff in some of our operations in the current economic conditions. With business units. There were also positive developments, some 13,500 enthusiastic and highly professional such as the increased activities for offshore wind farm employees we are ready to grow in line with further projects and the increased usage of ROVs during economic recovery. Our confidence in the future is also installation work at sea. reflected in the proposal to maintain the dividend at the same level as last year. After several consecutive record breaking years, the changed circumstances have led to revenue and profit in Yours faithfully, 2009 being lower than in the previous year; revenue Fugro N.V. decreased by 5% to EUR 2.05 billion and net profit decreased by 7% to EUR 263.4 million.

Despite less favourable market circumstances, our healthy financial position enables us to continue to invest in people, technology and equipment needed to grow in future. Using well-trained and experienced staff and state of the art equipment is key to our ability to respond successfully to new opportunities: working in deeper water, alternative energy developments, accurate K.S. Wester mapping from the air etc. In the ‘Wide spectrum of President and Chief Executive Officer services’ section of this year’s report, some of these developments are highlighted.

2 ■ Fugro at a glance

■ Major developments in 2009

• In 2009 Fugro’s revenue decreased by 4.7% to • Earnings per share decreased by 10.8% to EUR 3.46 EUR 2,053.0 million (2008: EUR 2,154.5 million). (2008: EUR 3.88). Cash flow per share was 0.3% lower Revenue decreased organically by 5.6% and at EUR 5.99 (2008: EUR 6.01). increased 1.1% as a result of acquisitions. The foreign currency effect was 0.2% negative. • It is proposed to maintain the dividend for 2009 at EUR 1.50 per (certificate of an) ordinary share • The net result decreased by 7.1% to EUR 263.4 (2008: EUR 1.50), to be paid at the option of the million (2008: EUR 283.4 million). holder in cash or in (certificates of) ordinary shares.

• The net profit margin decreased to 12.8% • The investments for the capacity renewal and (2008: 13.2%). expansion decided on in 2006 were continued according to plan and amounted to EUR 250.0 • Earnings before interest, taxes, depreciation and million in 2009. amortisation (EBITDA) increased with 3.0% to EUR 551.1 million. • The annual revenue of the in 2009 acquired companies amounts to EUR 34.8 million. The total • The results from operating activities (EBIT) cost of the acquisitions completed in 2009 was decreased by 4.7% to EUR 367.4 million (2008: EUR 37.5 million. EUR 385.7 million). • The backlog at the start of 2010 amounted to • All three divisions were profitable. However, the EUR 1,364.0 million, compared to EUR 1,600.4 Geoscience division, which includes exploration million as at the beginning of 2009, which is 14.8% related services, saw a noticeable decline in lower. The order backlog for work to be carried out profitability. The Geotechnical division and Survey covers eight months. division were largely able to mitigate the effects of the changed market situation.

The term ‘shares’ as used in this Annual Report should, with respect to shares issued by Fugro N.V., be construed to include certificates of shares (also referred to as ‘share certificates’ or ‘depositary receipts’ for shares) issued by Stichting Administratiekantoor Fugro (also referred to as ‘Fugro Trust Office’ or ‘Trust Office’), unless the context otherwise requires or unless it is clear from the context that this is not the case. For further information please refer to page 74.

Fugro at a glance 3 Change ■ K E Y F I GU r e s 2009 in % 2008 2007 2006 2005

Result (x EUR million) Revenue 2,053.0 (4.7) 2,154.5 1,802.7 1,434.3 1,160.6 Gross profit (net revenue own services) 1,428.6 (0.3) 1,432.2 1,197.9 931.2 754.9 Results from operating activities (EBIT) 367.4 (4.7) 385.7 324.8 211.6 144.1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 551.1 3.0 535.2 439.6 295.9 218.8 Cash flow 456.8 4.1 438.9 337.1 226.1 176.1 Net result 263.4 (7.1) 283.4 216.2 141.0 99.4 Net margin (%) 12.8 13.2 12.0 9.8 8.6 Interest cover (factor) 47.8 14.1 13.1 10.9 7.2

Capital (x EUR million) Balance sheet total 2,366.3 11.4 2,123.3 1,700.1 1,405.7 1,138.7 Group equity 1,199.5 28.2 935.8 707.0 565.8 470.8 Solvency (%) 50.2 43.7 41.2 40.0 40.9 Return on shareholders’ equity (%) 24.9 35.9 35.4 28.6 30.4 Return on invested capital (%) 23.5 29.7 30.0 23.7 22.3

Assets (x EUR million) Tangible fixed assets 1,043.2 21.4 859.1 599.3 412.2 262.8 Investments (including acquisitions and assets under construction) 359.6 (8.8) 394.4 341.1 245.9 90.4 Of which: assets of acquisitions 9.9 14.4 8.7 21.0 10.1 investments 320.4 323.0 291.0 182.9 78.8 assets under construction 29.3 57.0 41.4 42.0 1.5 Depreciation of tangible fixed assets 173.6 23.6 140.4 107.7 78.2 69.4

Data per share (x EUR 1.–) 1) Capital and reserves 15.08 24.8 12.12 9.94 8.08 6.76 Result from operating activities (EBIT) 4.82 (8.9) 5.29 4.67 3.08 2.18 Cash flow 5.99 (0.3) 6.01 4.84 3.29 2.67 Net result 3.46 (10.8) 3.88 3.11 2.05 1.51 Dividend for the year under review 1.50 0.0 1.50 1.25 0.83 0.60 Share price: year end 40.26 20.485 52.80 36.20 27.13 Share price: highest 41.85 59.95 62.00 36.64 27.40 Share price: lowest 19.085 19.32 34.91 27.13 15.14 Average price/earnings ratio 8.8 10.2 15.6 15.5 14.1 Average dividend yield (%) 2) 4.9 3.8 2.6 2.6 2.8

Issue of nominal shares (in thousands) At year-end 78,772 76,608 70,421 69,582 68,825 Entitled to dividend 77,554 75,138 69,879 68,839 67,886 Average (entitled to dividend) 76,210 73,048 69,614 68,761 65,976

N u m b e r o f e m p l oy e e s At year-end 13,482 (1.1) 13,627 11,472 9,837 8,534

4 Change ■ K E Y F I GU r e s 2009 in % 2008 2007 2006 2005

Result (x EUR million) Revenue Gross profit (net revenue Revenue 2,053.0 (4.7) 2,154.5 1,802.7 1,434.3 1,160.6 (x EUR 1 mln.) own services) (x EUR 1 mln.)

Gross profit (net revenue own services) 1,428.6 (0.3) 1,432.2 1,197.9 931.2 754.9 2,250 1,500 Results from operating activities (EBIT) 367.4 (4.7) 385.7 324.8 211.6 144.1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 551.1 3.0 535.2 439.6 295.9 218.8 1,800 1,200

Cash flow 456.8 4.1 438.9 337.1 226.1 176.1 1,350 900 Net result 263.4 (7.1) 283.4 216.2 141.0 99.4 Net margin (%) 12.8 13.2 12.0 9.8 8.6 900 600

Interest cover (factor) 47.8 14.1 13.1 10.9 7.2 450 300

Capital (x EUR million) 0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Balance sheet total 2,366.3 11.4 2,123.3 1,700.1 1,405.7 1,138.7 Group equity 1,199.5 28.2 935.8 707.0 565.8 470.8 Solvency (%) 50.2 43.7 41.2 40.0 40.9 Cash flow Earnings before interest, taxes, Return on shareholders’ equity (%) 24.9 35.9 35.4 28.6 30.4 (x EUR 1 mln.) depreciation and amortisation (EBITDA) (x EUR 1 mln.) Return on invested capital (%) 23.5 29.7 30.0 23.7 22.3 500 600

Assets (x EUR million) 400 480

Tangible fixed assets 1,043.2 21.4 859.1 599.3 412.2 262.8 300 360 Investments (including acquisitions and assets under construction) 359.6 (8.8) 394.4 341.1 245.9 90.4 Of which: assets of acquisitions 9.9 14.4 8.7 21.0 10.1 200 240

investments 320.4 323.0 291.0 182.9 78.8 100 120 assets under construction 29.3 57.0 41.4 42.0 1.5 Depreciation of tangible fixed assets 173.6 23.6 140.4 107.7 78.2 69.4 0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Data per share (x EUR 1.–) 1) Capital and reserves 15.08 24.8 12.12 9.94 8.08 6.76 Net result per share Net result Result from operating activities (EBIT) 4.82 (8.9) 5.29 4.67 3.08 2.18 (x EUR 1.–) (x EUR 1 mln.)

Cash flow 5.99 (0.3) 6.01 4.84 3.29 2.67 4.5 300 Net result 3.46 (10.8) 3.88 3.11 2.05 1.51 Dividend for the year under review 1.50 0.0 1.50 1.25 0.83 0.60 3.6 240

Share price: year end 40.26 20.485 52.80 36.20 27.13 2.7 180 Share price: highest 41.85 59.95 62.00 36.64 27.40 Share price: lowest 19.085 19.32 34.91 27.13 15.14 1.8 120

Average price/earnings ratio 8.8 10.2 15.6 15.5 14.1 0.9 60 Average dividend yield (%) 2) 4.9 3.8 2.6 2.6 2.8 0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Issue of nominal shares (in thousands) At year-end 78,772 76,608 70,421 69,582 68,825 Entitled to dividend 77,554 75,138 69,879 68,839 67,886 Average (entitled to dividend) 76,210 73,048 69,614 68,761 65,976 1) More data regarding the earnings per share can be found in note 5.45 to the annual accounts (pages 123 and 124). 2) Dividend for the year, to be paid the following year, divided by the average of the highest and lowest share price N u m b e r o f e m p l oy e e s during the year. At year-end 13,482 (1.1) 13,627 11,472 9,837 8,534

Fugro at a glance 5 ■ Mission AND PROFILE Profile Fugro provides the people, equipment, expertise and Mission technology that support the exploration, development, Fugro’s mission is to be the world’s leading service production and transportation of the world’s natural provider for the collection and interpretation of data resources. Fugro also provides its clients with the relating to the earth’s surface and sub-surface and for technical data and information required to design, associated services and advice in support of infrastructure construct and maintain structures and infrastructure development on land, along the coast and on the seabed. in a safe, reliable and efficient manner.

Fugro’s activities are carried out across the world, Fugro operates as an independent service provider and onshore, offshore and from the air, and are primarily has no commercial or other direct interests in the projects aimed at the: of its clients. As Fugro is often involved in the early • oil and gas industry; exploration and development phase of (potential) • construction industry; projects, confidentiality about Fugro’s engagements is • mining sector; and essential in many cases. • governments. Fugro’s clients operate in many locations and in different Fugro achieves this mission through: conditions. To be able to meet their needs in the best • customer focus; possible way, Fugro’s organisational structure is • the provision of high-quality, innovative services; decentralised and client-oriented, delivering a wide range • professional, specialised employees; of services in a variety of operating environments and • advanced, unique technologies and systems; conditions. Fugro delivers these services from a global • a worldwide presence in which the exchange of network of offices and facilities. knowledge and expertise, both internally and externally with the client, plays a central role.

13,500 employees 55 vessels 75 CPT trucks 24 laboratories 25 jack-up platforms

215 50 aircraft land-based drillrigs 130 ROVs 8 AUVs 275 offices 16 off-shore drillrigs

6 Fugro strives to achieve strong market positions based on Survey (in-house) developed technologies, high-value services and The Survey division provides a range of services to support a strong international or regional presence. the activities of the oil and gas industry and a range of other clients including government agencies, the Fugro was founded in the Netherlands in 1962, has been construction and transportation sectors and agriculture. listed on Euronext Amsterdam since 1992 and was Offshore services include geophysical investigation for included in the main Amsterdam AEX-index as of geohazards, pipeline and cable route surveys and September 2008. inspection, construction support services, hydrographic charting, meteorology and oceanographic studies. Subsea Fugro grows organically and through acquisitions, and by services revolve around the use of remotely operated the end of 2009 employed some 13,500 staff in more than vehicles (ROVs) to support subsea inspection, construction 50 countries. and drilling. Geospatial services are focused on land survey and aerial/satellite mapping services for a wide range of clients. In addition, Fugro’s global positioning ■ FUGRO’S ACTIVITIES systems (which augment GPS and Glonass to provide precise positioning in real-time world-wide) are employed Fugro provides a broad scope of activities from a not only to support the above services, but are also worldwide network of offices and facilities. Services that provided on a subscription basis to other industries such are provided locally are supported by a global knowledge as agriculture. base and resource pool of experienced personnel. Geoscience Consequently, to achieve the optimum results, clients are The Geoscience division concentrates on collecting, offered a cohesive combination of Fugro’s products and processing, interpreting, managing and storing services. The scope of the activities Fugro offers worldwide geophysical and geological data. These data sets are used is unique. The activities are organised in three divisions: for evaluating the presence of natural resources, Geotechnical, Survey and Geoscience. including oil, gas, water and minerals, and for optimising the exploration, development and production of those Geotechnical resources. A broad range of geophysical data sets are The Geotechnical division investigates the engineering collected including marine seismic, gravity, magnetics properties and geological characteristics of soils and rocks and electromagnetics. The data sets are collected at sea, using (in-house) developed proprietary technologies, from the air and on land using vessels, low flying provides advice regarding foundation design and provides airplanes and helicopters. Clients are oil and gas construction materials testing. These services support companies, mining companies and governmental clients’ projects worldwide in the onshore, near shore and organisations. offshore environments, including deep water. Typical projects include support of infrastructure development, construction, flood protection and the design of oil and gas installations.

Fugro at a glance 7 ■ FINANCIAL TARGETS AND STRATEGY In the most important market sector – oil and gas – the spread of Fugro’s services across the exploration, Financial targets development and production phases is a key factor. Fugro’s target is to achieve, under comparable economic This means Fugro provides services in many phases of circumstances, a structural increase in earnings per share the (20 – 30 year) life-cycle of an oil or gas field. Avoiding for its shareholders. Fugro’s long-term policy is aimed dependence on one phase of this market or single group at generating a steady growth in net result based on of clients is an essential component of Fugro’s strategy. increasing revenue. The result is a business that is less cyclical.

Important financial targets are: Profit margins vary per activity depending on the specific • growth in earnings per share averaging 10% per market circumstances. The target profit margin for the annum; more risky or capital intensive activities is higher than • strong cash flow with an average annual growth the overall company average. per share of 10%; • maintaining a healthy balance sheet and solvency The long-term aim is to achieve robust but controlled (30 to 35%); profit growth through: • interest cover (EBIT/Interest) of more than 5. • a broad but cohesive services portfolio; • the manner in which Fugro is financed; Fugro’s financial strategy is aimed at the utilisation and/ • the market-oriented international organisational or optimisation of: structure; • the ratio between risk and return of the various • continuous development and training of employees; business activities; • specific investments in equipment and technology; • the ratio between shareholders’ equity and short-term/ • management focus on increasing net result. long-term borrowings; • the use of both public and private capital markets; Fugro strives to improve profitability with a focus on core • the duration and phasing of the different financing activities and niche markets by: components. • increasing operational scale; • building strong market positions; S t r a t e g y • continuing research and development; Fugro aims at achieving equilibrium between its various • cooperation and development for and with clients; activities in order to be able to meet its targets. Fugro • being selective about the projects that are taken on; strives for a balance between services related to • acquiring companies with a high added-value. exploration, development and production activities for the oil and gas industry, and those related to other The favourable market conditions of recent years enabled markets, such as mining and construction. This also Fugro to perform well above its set targets, resulting in results in a balance between offshore and onshore a doubling of revenue over the period 2005 – 2008 and activities. Moreover, Fugro strives for a good geographical a net profit margin that has increased to around 13%. spread. This diverse range of related activities reduces The market situation has been negatively influenced by Fugro’s sensitivity to market fluctuations in a particular the global economic downturn, resulting in a slight sector. As an independent service provider, Fugro provides reduction in both revenue and net profit in 2009. a broad spread of services to its clients. This also The uncertainties regarding the global economy still contributes to a good control of business risks. remain entering into 2010.

Fugro strives for growth, both organically and through acquisitions. To achieve organic growth Fugro invests in equipment and human capital. Organic growth is also achieved by actively developing new technologies and services.

8 A Fugro Seacore jack-up platform taking samples at La Réunion.

Market positions Research and development Fugro’s strategy is based primarily on securing and, where Research and development is of strategic importance to possible, expanding strong market positions. Fugro. The search for ways to expand and improve services Complementing and broadening its package of closely to clients is unceasing and cooperation with clients plays related services is a primary objective. Growth in adjacent a major role in this. Many new ideas are generated sectors, by responding actively and flexible to market through joint development projects. Development of developments and client needs, is also an important specific measuring equipment and analytical methods component of the strategy. also plays an important role. Each year Fugro spends an estimated 3% of revenue on research and development. On land, Fugro’s major clients are governments, industry Some of this expense is incurred as part of the execution and construction companies in local and regional of projects. markets. In these markets Fugro holds strong regional positions. Cooperation and scale advantages At sea, the major clients are oil and gas companies, and Effective cooperation between Fugro’s business units is offshore contractors that operate in a global market. promoted at various levels. Critical mass is also a key Fugro has a leading position in offshore survey and factor for the successful execution of large assignments. offshore geotechnical activities. Capacity utilisation and cooperation are optimised In other market segments, like mining and precise through the exchange of equipment, employees and positioning, Fugro holds leading market positions in expertise between the various activities and by extensive niche markets with a large variety of clients. employee training. Fugro promotes technological renewal by clustering the knowledge available within and outside Acquisitions the Group. The integration of information systems and To broaden its base and ensure continued sustainable the utilisation of scale advantages enhance the service growth, Fugro usually completes a number of acquisitions provided to clients. each year. Generally these serve to strengthen or achieve good market positions or to obtain special technologies. Because acquisitions always involve an element of risk, a thorough and extensive due diligence is carried out before the decision to acquire a company is taken. This limits the risks considerably. Acquisition evaluation is based not only on financial criteria but also on: • added-value for Fugro; • cohesion with Fugro’s activities and services; • match with Fugro’s culture; • growth potential; • a good position in a niche market or region; • technical and management qualities; and • risk profile.

Fugro at a glance 9 ■ Information for shareholders

Important dates

5 March 2010 Publication of the 2009 annual figures, press conference and analysts’ meeting with webcast 29 April 2010 Record date for registration to attend the Annual General Meeting 6 May 2010, Trading update regarding the development of the business before trading hours 6 May 2010, Annual General Meeting in The Hague, Crowne Plaza – Promenade Hotel, dual 14.00 hours language webcast (Dutch and English) 10 May 2010 Ex-dividend date 12 May 2010 Record date dividend entitlement 21 May 2010 Last date for notification of dividend preference – cash or (certificates of) shares 26 May 2010, Determination and publication of the amount of the dividend in (certificates of) shares after trading hours based upon the average of the closing price of the shares at the close of business of Euronext Amsterdam on 24, 25 and 26 May 2010 28 May 2010 Payment of the dividend related to financial year 2009 6 August 2010 Publication of the half-yearly figures and announcement of the profit forecast for 2010, press conference and analysts’ meeting with webcast 18 November 2010, Trading update regarding the development of the business before trading hours 10 March 2011 Publication of the 2010 annual figures, press conference and analysts’ meeting with webcast

Listing on the stock exchange Dividend policy Certificates of shares in Fugro are listed on Euronext Fugro strives for a pay-out ratio of 35 to 55% of the net Amsterdam. Fugro has been listed on Euronext result. The shareholder (or certificate holder) may choose Amsterdam since 1992 and was included in the main between a dividend entirely in cash or entirely in Amsterdam AEX-index as of September 2008 (symbol: (certificates of) shares charged to the reserves. In 2009 FUR, ISIN code: NL0000352565). Options on Fugro about 54% of the holders of (certificates of) shares chose certificates of shares have been traded on NYSE Liffe since to receive the dividend for 2008 in (certificate of) shares July 2002. (2008: 61%). In 2009 2,164,520 shares have been issued for this purpose. The market capitalisation of Fugro at the end of February 2010 amounts to approximately EUR 3.4 billion. Dividend for 2009 It is proposed that the dividend for 2009 will be As far as is known, approximately 60% of the (certificates maintained at EUR 1.50 per ordinary share (2008: EUR of) shares are held by foreign investors, mainly from the 1.50), to be paid at the option of the holder: United Kingdom and the United States. Information on • in cash, or the shares can be found on pages 4 and 5 (key figures) and • in (certificates of) ordinary shares. on pages 10, 123 and 124.

Data per share (x EUR 1.–) 2009 2008 2007 2006 2005

Cash flow 5.99 6.01 4.84 3.29 2.67 Net result 3.46 3.88 3.11 2.05 1.51 Dividend paid out in the year under review 1.50 1.25 0.83 0.60 0.48 Proposed dividend over the year under review 1.50 1.50 1.25 0.83 0.60

10 In case no choice is made, the dividend will be paid in Change in issued (certificates of) ordinary shares. shares 2009 2008 The proposed dividend equates to a pay-out percentage of 44.2% of the net profit. Issued on 1/1 76,607,958 70,421,443 Stock dividend 2,164,520 1,028,345 Holders of (certificates of) shares have until 21 May 2010 Conversion of convertible to make their dividend preference known. The loan in shares – 5,158,170 determination of the number of (certificates of) shares that entitles the holder to one new (certificate of a) share Issued on 31/12 78,772,478 76,607,958 will take place on 26 May 2010 based upon the average of Purchased for option the closing price of the shares at the close of business of scheme on 31/12 1,218,776 1,469,696 Euronext Amsterdam on 24, 25 and 26 May 2010. To arrive at a whole number a deviation of a maximum of 5% of the Entitled to dividend calculated value may be applied. The dividend will be as of 31/12 77,553,702 75,138,262 made payable on 28 May 2010. No trading will take place Average number of on Euronext Amsterdam in dividend rights. outstanding shares 76,210,346 73,047,931

The percentage of (certificates of) shares that was represented in person or by proxy in the shareholders’ meetings over the past three years was as follows: Remote electronic voting Depending on experience with the use of electronic means of communication to follow the course of a general Certifi- cates and Shares meeting and to cast votes during the meeting without shares held by % of the being present in person or by proxy, Fugro will evaluate (ex Trust Trust issued Office) Office* capital whether to facilitate this.

EGM 2009 36.3 62.8 99.1 Share/certificate holdings of 5% or more AGM 2009 35.2 64.0 99.2 As far as Fugro is aware, the only holders of (certificates of) AGM 2008 34.3 64.9 99.2 shares with an interest of more than 5% (as referred to in AGM 2007 42.1 56.9 99.0 the Financial Markets Supervision Act in the Netherlands) in Fugro’s share capital (besides the Trust Office) as of * Fugro Trust Office Foundation (the ‘Trust Office’) votes on  1 March 2010 are: the shares for which certificates have been issued and on which shares the certificate holders do not vote themselves as ING Groep N.V. 9.64% representative of the Trust Office. Mr. G-J. Kramer 1) 5.80% WAM Acquisitions GP, Inc. 5.26% 1) Directly and indirectly. Agenda of the general meeting The agenda, including explanatory notes, of the general As stated on page 10, only certificates of ordinary shares meeting will be posted in a timely fashion (in principle at are listed on Euronext Amsterdam. These certificates are least six weeks prior to the meeting) on Fugro’s website: issued by the Trust Office, which carries out the www.fugro.com. The agenda shall list which items are for administration of the underlying shares (for which it has discussion and which items are to be voted upon. Hard issued the certificates). On 1 March 2010 the Trust Office copies can be ordered by telephone (+31(0)70 – 311 14 22) held 91.1% of the issued (underlying) ordinary shares. or by e-mail ([email protected]).

Fugro at a glance 11 Movement in number of shares purchased In 2009 Fugro purchased 550,000 certificates of shares to cover the option scheme at an average price of EUR 22.49 per certificate to cover 2009 2008 the option scheme. On 31 December 2009 a total of 1,218,776 certificates of shares was held to cover the Situation on 1/1 1,469,696 542,716 option scheme. These certificates are not entitled to Purchased 550,000 1,581,000 dividend and there are no voting rights attached to the Sold in connection with underlying shares. The exercise of all outstanding options option exercise (800,920) (654,020) as of 31 December 2009, including the options granted on this date, could – after using the purchased certificates of Situation on 31/12 1,218,776 1,469,696 shares – lead to an increase of the issued share capital by a maximum of 6.5%. Since the beginning of 2010, Granted, not exercised 36,300 options have been exercised. options as of 31/12 6,334,430 5,993,550 Options are granted in such way that at any moment the maximum number of outstanding options to acquire ordinary shares in Fugro will not exceed 7.5% of the issued Participations and employee options ordinary share capital. In order to mitigate dilution, it is As far as is known, on 31 December 2009 around one Fugro’s policy to re-purchase certificates of shares to percent of Fugro’s share capital was held by members of cover the option scheme with the result that no new the Board of Management and other employees within (certificates of) shares are issued when options are the Group. Of the total number of employee options exercised. granted during the past years, 5,167,880 options (excluding the option grants as per 31 December 2009) Investor relations were still outstanding on 31 December 2009. Fugro offers comprehensive information regarding the On 31 December 2009 1,166,550 new options, with an company on its website: www.fugro.com. Meetings with exercise price of EUR 40.26, were granted to a total of analysts, presentations to analysts, presentations to 639 employees. Of these options 27.6% were granted to investors and institutional investors (road shows) and members of Fugro’s Board of Management (see also press conferences are announced in advance on Fugro’s page 142). website and/or by means of press releases. Shareholders and certificate holders are able to follow most of these Options are granted to a broad group of employees. meetings and presentations in real time, for example by The granting of options is dependent on the achievement means of webcasting or telephone. After the meetings, of the targets of the Group as a whole and of the the presentations are posted on Fugro’s website. individual operating companies as well as on the The presentations are given particularly during the contribution of the relevant employee to the long term periods March/April and August/September. During these development of the company. Option grants to the presentations Fugro’s strategy and activities are explained members of the Board of Management are based upon the in detail by members of the Board of Management. remuneration policy and the option scheme that were Individual and collective personal contact with investors adopted and approved by the Annual General Meeting on and analysts is also maintained annually via around three 14 May 2008. hundred ‘one-on-one’-meetings, several presentations and telephone conferences. Options are granted annually on 31 December and the option exercise price is equal to the price of the Fugro has formulated a policy on bilateral contacts with certificates at the closing of Euronext Amsterdam on the the shareholders and certificate holders. This policy is last trading day of the year. The vesting period for the posted on its website: www.fugro.com. granted options is three years starting at the first of January of the year following the grant date. The option period is six years and the options may only be exercised when the option holder is still employed by Fugro. Standard exceptions apply to the latter rule in connection with retirement, long-term disability and death.

12 Field measurements relating to the expansion of the Abu Dhabi ­International Airport.

Prevention of the misuse of inside Certificate price and volume trend information (January 2005 – December 2009)

Fugro considers prevention of the misuse of inside 75 30,000 information when trading in securities to be essential for

its relationship with the outside world. Fugro has issued 60 24,000 internal guidelines on the holding of and effecting

transactions in Fugro securities (certificates, shares, 45 18,000 options etc.) which apply to the members of the

Supervisory Board, the Board of Management, the other 30 12,000 members of the Executive Committee and other

designated persons (among which staff, management of 15 6,000 operating companies and a number of external advisors

and service providers). A record is kept of all so-called 0 0

‘insiders’. Fugro has appointed a Compliance Officer. 2005 2006 2007 2008 2009 Dealings in securities by the members of the Supervisory Board, the Board of Management and the other members Closing price (scale left). of the Executive Committee are notified to the Share trade volume per month (x 1,000), (scale right). Netherlands Authority for the Financial Markets (‘AFM’). Source: Euronext The public database of the AFM can be consulted on the website of the AFM: www.afm.nl.

Other information Further information about Fugro which is relevant to the shareholders and certificate holders is available on Fugro’s website: www.fugro.com. Fugro can be contacted by e-mail ([email protected]) and by telephone (+31(0)70 – 311 14 22).

% Distribution of shareholders year-end (x 1,000 shares) 2009

80,000 The Netherlands 38.7

64,000 Other 10.2 Switzerland 2.0

48,000 Germany 1.8 France 1.8

32,000 Belgium 2.8 Luxembourg 4.6

16,000 United States 17.6 United Kingdom 20.5

0

End 2004 End 2005 End 2006 End 2007 End 2008 End 2009 100.0

Fugro at a glance 13 ■ Supervisory Board

From left to right: F.J.G.M. Cremers (Vice-chairman), Th. Smith, F.H. Schreve (Chairman), G-J. Kramer, J.A. Colligan, M. Helmes.

name Mr. F.H. Schreve (1942) name Mrs. M. Helmes (1965) function chairman committee member audit committee committee member remuneration and nomination committee nationality German nationality Dutch first appointed 2009 first appointed 1983 current term until AGM 2013 current term until AGM 2010 expertise financial administration and accounting; internal risk expertise management strategy and risks inherent to the management and control systems; financing and company’s business; management selection, general financial management recommendation and development; compliance; other functions Member of the Executive Board and CFO of shareholder and employee relations ThyssenKrupp Elevator AG, Düsseldorf other functions Supervisory Board member HVC N.V. Chairman of the Board Foundation preference shares H.E.S. Beheer N.V., name Mr. G-J. Kramer (1942) Foundation Trust Office TKH N.V., Foundation Indivi­ committee chairman remuneration and nomination committee duele Begeleiding Top Hockey, Foundation Waarborg­ as of 1 January 2010 fonds Sport and Foundation Universiteitsfonds Twente. nationality Dutch Supervi­­­­sory Board Chairman Sint Lucas Andreas first appointed 2006 Ziekenhuis and Foundation National Park De Hoge current term until AGM 2010 Veluwe. Chairman Advisory Board European Leadership expertise management selection, recommendation and Platform development; management strategy and the company’s risk profile; oil and gas sector name Mr. F.J.G.M. Cremers (1952) other functions Chairman Supervisory Board ASM International N.V. and function vice-chairman Scheuten Solar Holding B.V. Vice-chairman Board committee chairman audit committee Damen Shipyards Group N.V. Supervisory Board member nationality Dutch N.V. Bronwaterleiding Doorn, Energie Beheer Nederland first appointed 2005 B.V., ABN AMRO N.V. and Trajectum (Mammoet) B.V. current term until AGM 2013 Chairman Board IRO (branch association for suppliers to expertise financial administration, financing; internal risk the oil and gas industry in the Netherlands). Chairman management and control systems; compliance; oil Advisory Board Delft Technical University. Chairman and gas sector; shareholder and employee relations Service Organisation Protestant Churches in the other functions Supervisory Board member N.V. Nederlandse Netherlands, Chairman Leiden Pieterskerk Foundation Spoorwegen, Vopak N.V., Unibail-Rodamco S.E., and Chairman Board Amsterdam Sinfonietta. Board Luchthaven Schiphol N.V. and Parcom Capital B.V. Board member Dutch Maritime Network Foundation, member Foundation preference shares Philips, Foundation Beelden aan Zee Museum and Heijmans and Lodewijk Foundation (preference shares The Concertgebouw Fund Foundation Océ). Member of the Capital Market Committee of the Netherlands Authority for the Financial Markets (AFM). name Mr. Th. Smith (1942) Member of the Investigation Committee into the affairs committee member remuneration and nomination committee of Fortis N.V. on behalf of the Enterprise Chamber of nationality American the Dutch High Court of Amsterdam, The Netherlands. first appointed 2002 Nominated for appointment to the Supervisory Board current term until AGM 2010 of SBM Offshore N.V. on 14 April 2010 expertise management strategy and the company’s risk profile; management selection, recommendation and name Mr. J.A. Colligan (1942) development; innovation and technology development; committee member audit committee the oil and gas sector nationality British other functions Chairman of the Board Smith Global Services, Inc., first appointed 2003 Board member Houston Advanced Research Center and current term until AGM 2011 Director of WWW United, Inc. expertise management strategy and risks inherent to the company’s business; management selection, Secretary to the Supervisory Board recommendation and development, oil and gas sector, innovation and technology development W.G.M. Mulders (1955) other functions Director Society of Petroleum Engineers Foundation

14 ■ Report of the Supervisory Board

As a result of the worldwide financial crisis Fugro had to Composition and profile of the operate under more challenging circumstances than in Supervisory Board previous years. Despite this, the Company was able to The Supervisory Board comprises of persons with Dutch, produce good results, albeit that revenue and net result British, American and German nationality. Information are below those of the record year 2008. We consider that about each member of the Supervisory Board is included the Board of Management took the necessary measures in on page 14 of this Annual Report. The Supervisory Board order to react in the best way in view of the effects of the has prepared a profile of its size and composition, taking recession. Fugro’s strategy to provide worldwide a broad, account of the nature of the company, its activities and well balanced portfolio of services to a large variety of the desired experience and background of the clients provided a sound basis to mitigate to a large extent Supervisory Board members. This profile is available on the effects of the rapidly changing market circumstances. Fugro’s website: www.fugro.com. The composition and The solid financial position enables the Company to qualities of the Supervisory Board as a whole should be continue its investments for growth in future years. in line with the Company’s size, portfolio, nature, culture, geographical spread and its status as a listed company. Annual accounts and dividend proposal When a proposal is made for the (re)appointment of This Annual Report includes the 2009 Annual Accounts, a (new) supervisory director, the Supervisory Board which are accompanied by an unqualified report of the primarily looks at the expertise, experience and external auditor, KPMG Accountants N.V. (‘KPMG’). These independence of the candidate. The Supervisory Board Annual Accounts were prepared in accordance with aims for a diverse composition in terms of such factors International Financial Reporting Standards as adopted as gender and nationality. by the European Union and section 9 of Book 2 of the Dutch Civil Code. The division of duties within the Supervisory Board and the procedure of the Supervisory Board are laid down in We have discussed the Annual Accounts with the Board of terms of reference. The terms of reference of the Management in the presence of KPMG. We are of the Supervisory Board (including the terms of reference of the opinion that the Annual Accounts and the report by the Audit Committee and the Remuneration and Nomination Board of Management provide a true and fair picture of Committee) are available on Fugro’s website. the state of affairs within Fugro and form a good basis on which to hold the Board of Management accountable for Not more than one Supervisory Board member shall be the management policies pursued and the Supervisory non-independent under the terms of the Dutch Corporate Board accountable for its supervision of the management Governance Code (‘Code’), this being at present policies pursued. Mr. G-J. Kramer. Preceding his appointment as Supervisory Director in May 2006, Mr. Kramer was a member (CEO) of We propose that the shareholders adopt the 2009 Annual Fugro’s Board of Management until November 2005. Accounts and discharge the Board of Management for its This is in accordance with the Code (best practice management and the Supervisory Board for its provision III.2.2) and as a result the composition of supervision. We endorse the proposal of the Board of the Supervisory Board complies with the independence Management to maintain the dividend for 2009 at requirement. EUR 1.50 per ordinary share, to be paid at the option of the holder in cash payment or in (certificates of) ordinary Supervisory Board members do not carry out any other shares. If no choice is made, the dividend will be settled in functions that could jeopardise their independence. (certificates of) ordinary shares. The proposed dividend With the exception of Mr. Kramer who, as the former CEO equates to a pay-out percentage of 44.2% of the net result. of Fugro, owns employee options awarded to him at that time in that capacity, none of the other Supervisory Board members held any (options on) shares or certificates of shares in Fugro, Besides that Mr. Kramer also holds a substantial interest in Fugro (see page 11 of this Annual

Report of the Supervisory Board 15 Report and pages 143 and 144 of the Annual Accounts for were discussed and evaluated. Much attention was paid more details). to the ongoing worldwide financial crisis and as a result thereof the possible scenarios for the Company. Both the composition of the Supervisory Board and the The reappointment of KPMG was discussed and it was expertise and experience of its individual members decided to propose KPMG for reappointment at the comply with all rules and requirements. Annual General Meeting on 6 May 2010.

Plenary activities The functioning of the Board of Management, the In the year under review five scheduled meetings, Supervisory Board (and its Committees) and its individual each lasting more than one day, were convened by the members were discussed in absence of the Board of Supervisory Board and the Board of Management. Management as well was the general business progress. Supervisory Board members attended nearly all the The evaluation of the functioning of the Supervisory meetings held in 2009. Only once, one Supervisory Board Board, its Committees and its individual members was member was absent during one of the scheduled prepared by bilateral discussions between the Chairman meetings for personal reasons. In general, members of the and individual Supervisory Directors, which discussions Board of Management attended these meetings. Most of were followed by a plenary discussion. the meetings were also attended by the other members of the Executive Committee. Occasionally part of a meeting The findings of the external audit were discussed with was held in the absence of the Board of Management. KPMG. There were several regular contacts outside the In November a meeting was combined with visits to scheduled meetings between individual Supervisory operating companies in Houston and Lafayette in the Board members and members of the Board of United States. Every year (extensive) company visits take Management and Executive Committee on matters place. These annual visits also form part of the (annual) relating to the Company. In particular there were regular training, education and, if applicable, induction discussions between the Chairman of the Supervisory programme of the Supervisory Directors. Board and the CEO.

The major issues discussed during the meetings included Audit Committee amongst others the operational and financial targets; the In 2009 the members of the Audit Committee were general (overall) strategy designed to achieve the targets as Messrs. F.J.G.M. Cremers (chairman), J.A. Colligan and well as the strategies for the various business lines; the P.J. Crawford (until May 2009) and Mrs. M. Helmes (from restructuring of the Survey and Geoscience divisions as May 2009). The composition of the Audit Committee is in was announced at the beginning of 2009; the annual accordance with the requirements of the Code. budget (Profit Plan); the financial results; share price Collectively the members possess the required experience development; intended acquisitions and divestments; and financial expertise in order to focus on supervising post acquisition analysis; corporate social responsibility Fugro’s financial activities, annual accounts and the (CSR); health, safety and environment (HSE); major operation of the internal risk management and control investments; the filling of various senior management systems. Mr. Cremers and Mrs. Helmes were acting as positions; human resources (HR); information and financial expert within the meaning of the Code. communication technology (ICT); the main risks inherent The terms of reference of the Audit Committee are to the Company’s activities as well as the Board’s opinion included in the terms of reference of the Supervisory regarding the set-up and functioning of the internal risk Board and are available on Fugro’s website. management and control system; the corporate governance structure of the Company and in particular In 2009 the Audit Committee met three times. the new Dutch Corporate Governance Code and the The external auditor (KPMG) attended all three meetings. ‘Comply and Explain’ report as prepared by the Board of The annual accounts and half-yearly results were Management. discussed during the relevant meetings. Topics such as taxation, claims and disputes, compliance and the The reports of the Audit committee and of the financial crisis were discussed in depth. Risk areas, such Remuneration and Nomination Committee were also as hedging, fluctuations in currency exchange rates, discussed. In addition to these scheduled meetings, a few impairment and insurance were also discussed as was the interim meetings took place via conference call during functioning of the internal risk management and control which a number of intended investments and acquisitions system and the 2010 audit plan of the internal audit

16 function. The functioning of KPMG was evaluated in Principal points of the Remuneration Report 2009 detail (including KPMG’s approach to auditing the concerning the remuneration policy Company and the audit fees) and it was recommended The objective of the remuneration policy is to provide a to the Supervisory Board to reappoint KMPG as external remuneration system such that: auditor. The Audit Committee was informed of important • performance that is pursuant to the results and findings from the control visits. KPMG was given the strategy of Fugro is rewarded; opportunity to discuss issues with members of the Audit • top managers can be attracted and retained as Committee in the absence of Fugro’s Board of members of the Board of Management of Fugro. Management and staff. The key elements are: Remuneration and Nomination Committee • fixed (base) salary is determined at the median level of In 2009 the members of the Remuneration and a peer group of comparable companies (local and Nomination Committee were Messrs. F.H. Schreve international); (chairman), Th. Smith and Mr. G-J. Kramer. In 2009 the • variable income (annual bonus or short-term Committee met formally three times but also met incentive) depends on targets determined in advance informally on a number of occasions. As from 1 January with a maximum of twelve months (100%) of annual 2010 Mr. Kramer chairs the Committee. fixed salary. On-target performance will result in a The terms of reference of the Remuneration and bonus of eight months of annual fixed salary. Nomination Committee are included in the terms of The bonus is related to quantified financial targets and reference of the Supervisory Board and are available accounts for 2/3 of the annual bonus and the other on Fugro’s website. part of the bonus is related to non-financial / personal targets and will account for 1/3 of the annual bonus; The chairmanship of the Committee by both Mr. Schreve • financial targets and the weighing given to the (in 2009) as well as Mr. Kramer (from 1 January 2010) is not individual financial elements are as follows: earnings fully in accordance with best practice provision III.5.11 of per share 60%, net profit margin 20% and ROCE (return the Code. See page 71 for a further explanation. on capital employed) 20%. These financial elements are based on Fugro’s annual profit plan; Remuneration • non-financial targets are determined prior to the start As far as remuneration is concerned, the topics discussed of the relevant year. These targets are based on Fugro’s included the remuneration of the individual members of strategic agenda. These are qualitative individual the Board of Management, the remuneration policy for targets and/or collective targets that are the the members of the Board of Management and the stock responsibility of one or more directors and that can option scheme. The Supervisory Board has determined be influenced by them. These targets could include, the remuneration of the individual members of the Board among other things, health safety and environment of Management on a proposal by the Remuneration and (HSE), corporate social responsibility (CSR), personal Nomination Committee, within the scope of the development, etc.; remuneration policy adopted by the Annual General • stock options (long-term incentive). The stock options Meeting (‘AGM’) on 14 May 2008. for the Board of Management form part of a broad option scheme that is in existence already many years The Remuneration Report for the year 2009 was prepared and that is applicable to more than 600 managers by the Remuneration and Nomination Committee, in worldwide. Options are granted on the basis of the accordance with best practice provision II.2.12 of the contribution to the long term development of the Code, and has been approved by the Supervisory Board. Company, among which the development of the long This Report contains an account of the manner in which term strategy, on the basis of measurable targets such the remuneration policy has been implemented in 2009. as the (growth) targets in the strategic plan and in the Both the Remuneration Report and the remuneration annual profit plan. The option grants are based upon a policy are available on Fugro’s website. fixed value approach. When determining the number of options to be granted, the fair value at the moment of grant is calculated and each year the same value (e.g. as percentage of base salary) is granted. This part of the income of members of the Board of

Report of the Supervisory Board 17 Management (and other senior management) depends Further details of Fugro’s remuneration policy and of the also on the Fugro share price and is therefore linked to individual members of the Board of Management, broken the value of Fugro. Another objective of the stock down into its various components, is presented in the options is to provide an incentive for members of the Annual Accounts on page 141 and in the Remuneration Board of Management (and other senior management) Report 2009. to continue their employment relationship with Fugro; Nomination • Pension provisions and fringe benefits. The pension As far as nomination is concerned, the topics discussed provisions of the members of the Board of included the composition of the Supervisory Board, the Management are based upon a customary pension Board of Management and of the Executive Committee scheme and on an available premium system. and also their functioning. The assessment of and the The fringe benefits are commensurate with the succession planning for the Supervisory Board, the Board position held. of Management and senior executives were also discussed. In particular the succession and the reappointment of the The actual (financial and non-financial) targets are not Chairman were discussed (see below). disclosed because they qualify as competition-sensitive and hence commercially confidential information and Composition of the Supervisory Board, potentially price sensitive. the Board of Management and (re)appointments Before determining the remuneration of individual In the AGM held on 7 May 2009, Mrs. M. Helmes was members of the Board of Management, the Supervisory appointed as member of the Supervisory Board and Board analyses the possible outcomes of the variable was Mr. F.J.G.M. Cremers was reappointed. Mrs. Helmes remuneration components and how they may affect the followed an appropriate induction programme. remuneration of the members of the Board of Management. In the extraordinary General Meeting held on 16 September 2009, Mr. J. Rüegg was appointed as member The Supervisory Board may recover from the members of of the Board of Management. The Supervisory Board the Board of Management any variable remuneration considered this appointment to be in the interest of Fugro awarded on the basis of incorrect financial or other data in view of Mr. Rüegg’s extensive knowledge of the survey (claw back clause). Payment of variable remuneration to industry in order to further expand Fugro’s survey the members of the Board of Management is subject to activities. the correctness of the relevant (financial) data and adoption by the AGM of the Annual Accounts for the With effect from 1 October 2009 two members of relevant year. the Board of Management, Mr. P. van Riel and Mr. A. Steenbakker, rotated their operational tasks, with Under circumstances, for instance if the predetermined Mr. Van Riel taking up the responsibilities as COO (Chief targets/performance criteria would produce an unfair Operating Officer) for the Onshore Geotechnical business result due to extraordinary circumstances, the line and Mr. Steenbakker becoming responsible as COO Supervisory Board has the discretionary authority to for Information Services. make adjustments (upward or downward) to the amount of the annual bonus. If the Supervisory Board would (Re)appointments AGM 6 May 2010 during the year decide on the payment of severance pay or On 6 May 2010 the four-year appointment periods of other special remuneration to one or more members of Messrs. Van Riel and Steenbakker end. Both Mr. Van Riel the Board of Management, an account and an explanation and Mr. Steenbakker are nominated by the Supervisory of this remuneration shall be included in the Board for reappointment for a period of four years. remuneration report. As announced on 14 January 2010 the Supervisory Board The remuneration policy for the members of the Board of proposes to nominate Mr. H. Scheffer for appointment as a Management, as adopted by the AGM on 14 May 2008, will member of the Supervisory Board for a period of four continue to apply in 2010. The fixed (base) salary of the years. Among other roles, Mr. Scheffer (62) was Chief members of the Board of Management will not be raised Executive Officer (CEO) of Royal Gist-Brocades N.V. and of in 2010. Imtech N.V. (Internatio-Müller) and member of the Board

18 of Management of Royal DSM N.V. At present he is a member of the Supervisory Board of Rabobank Nederland, ‘Drie mollen sinds 1818’ B.V. and Coöperatie Cehave Landbouwbelang U.A. Furthermore he is a member of the Advisory Board of Heerema Group and of Gilde.

Mr. Scheffer is nominated in view of his experience as CEO of listed companies, his managerial qualities and experience, his technical background and his experience as a supervisory director.

It will also be proposed to reappoint the Supervisory Directors of which the four-year appointment periods end in May 2010. These are Messrs. F.H. Schreve, G-J. Kramer and Th. Smith. The Supervisory Board is aware that the reappointment of Mr. Schreve exceeds the maximum appointment period according to the Code. The Supervisory Board intends to appoint Mr. Scheffer, if he is appointed on 6 May 2010, as new Chairman of the Supervisory Board in May 2011. As a result it will be proposed to limit the appointment period of Mr. Schreve to one year. The Supervisory Directors consider it to be in the best interest of Fugro that continuation in the current chairmanship is maintained until the time that a successor is appointed.

Further information on the persons to be (re)appointed can be found on page 14 and page 20 of this Annual Report and will be included in the agenda for the AGM on 6 May 2010.

In conclusion We wish to thank the Board of Management, the Executive Committee as well as the employees, for their dedication and hard work for Fugro in the challenging year 2009. Thanks to their commitment and efforts, Fugro was able to produce good results under the prevailing circumstances. The year 2010 will be another year with opportunities and barriers and we are convinced that Fugro will be able to weather this forthcoming period successfully.

Leidschendam, 4 March 2010

F.H. Schreve, Chairman F.J.G.M. Cremers, Vice-chairman J.A. Colligan M. Helmes G-J. Kramer Th. Smith

Report of the Supervisory Board 19 From left to right: H. Meyer, S.J. Thomson, J. Rüegg, W.S. Rainey, P. van Riel, K.S. Wester (President and CEO), A. Jonkman, A. Steenbakker, J.H. Sommerville and O.M. Goodman.

■ executive committee efficiency the Group’s organisational structure is highly decentralised, but cohesive. Fugro N.V. is the holding company for a large number of The managements of the operating companies report operating companies located throughout the world carrying out directly to the Executive Committee. The members of the a variety of activities. To promote client-orientation and Board of Management sit on the Executive Committee.

Board of Management Other members of the Executive Committee name K.S. Wester (1946) name O.M. Goodman (1956) function President and Chief Executive Officer function Director Geospatial Services nationality Dutch nationality Irish employed by Fugro since 1981 employed by Fugro since 1993 appointed to Board of Management 1996 first appointed to current position 2001 (President and Chief Executive Officer 2005) current term permanent appointment name H. Meyer (1957) other function Member Supervisory Board Iv-Groep B.V. function Director Seismic Services nationality Norwegian name A. Jonkman (1954) employed by Fugro since 2005 function Chief Financial Officer first appointed to current position 2009 nationality Dutch employed by Fugro since 1988 name W.S. Rainey (1954) appointed to Board of Management 2004 function Director Offshore Geotechnical Services (reappointed in 2008) nationality American current term until AGM 2012 employed by Fugro since 1981 other function Member Supervisory Board Dietsmann N.V. first appointed to current position 2006 name P. van Riel (1956) name J.H. Sommerville (1949) function Director Onshore Geotechnical Services function Director Subsea Services (until 1 October 2009 Director Information Services) nationality British nationality Dutch employed by Fugro since 1978 employed by Fugro since 2001 first appointed to current position 2009 appointed to Board of Management 2006 current term until AGM 2010 name S.J. Thomson (1958) function Director General Geophysical Services name J. Rüegg (1944) nationality Australian function Director Offshore Survey Services employed by Fugro since 1999 nationality Swiss first appointed to current position 2006 employed by Fugro since 1994 appointed to Board of Management 2009 Company Secretary current term until AGM 2012 W.G.M. Mulders (1955) name A. Steenbakker (1957) function Director Information Services (until 1 October 2009 Director Onshore Geotechnical Services) nationality Dutch employed by Fugro since 2005 appointed to Board of Management 2006 current term until AGM 2010

20 ■ Report of the Board of Management

■ GENERAL fields. Fugro’s growing involvement in the maintenance of (complex) subsea facilities constructed by the oil and The financial crisis has led to a world-wide stagnation of gas industry will have a positive effect on Fugro in future. economic growth, and Fugro had to mark time in the year Fugro is also active in the infrastructure (approximately 2009 after five years of strong growth in revenue and 18% of revenue) and mining sectors (approximately 3% of profit. In the financial year 2009 both revenue and profit revenue). The remaining 4% of revenue comes from other reduced slightly compared to the previous year. During market segments. the year market circumstances drastically changed. The sharp fall in the price of oil in the beginning of the In financial terms, the year 2009 can be summarised as year led to reduced spending in the oil and gas sector, follows: which is important to Fugro. Other sectors in which Fugro • Fugro’s revenue decreased by 4.7% to EUR 2,053.0 operates such as mining and large infrastructure were million (2008: EUR 2,154.5 million). Revenue decreased also affected by the economic downturn. In particular organically by 5.6% and increased 1.1% as a result of Fugro’s exploration related activities were impacted as acquisitions. The foreign currency effect was 0.2% clients chose to rapidly adjust their spending on such negative; work. • Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 3.0% to Fugro has reacted to the changes in market circumstances EUR 551.1 million; with strict cost control and, where needed, adjustments • The results from operating activities (EBIT) decreased in capacity. This has resulted, notwithstanding increasing by 4.7% to EUR 367.4 million (2008: EUR 385.7 million); price pressure in the course of the year, in the net profit • Net result decreased by 7.1% to EUR 263.4 million margin being almost maintained. The net profit margin (2008: EUR 283.4 million); in 2009 is 12.8% (2008: 13.2%). • Net result per share decreased by 10.8% to EUR 3.46 (2008: EUR 3.88). All three divisions were profitable. However, the Geoscience division, which includes exploration related It is proposed to maintain the dividend for 2009 services, saw a noticeable decline in profitability. The at EUR 1.50 per (certificate of an) ordinary share Geotechnical division and Survey division were largely (2008: EUR 1.50). able to mitigate the effects of changed market situation.

While dealing with the short-term challenges, Fugro’s ■ Acquisitions healthy financial position has enabled the company to maintain its plans for growth in the medium term. This is In 2009 Fugro acquired eight companies and entered into reflected in the continuation of the scheduled renewal new cooperation agreements. and expansion of the vessel fleet and ROVs. In some cases, as in the marine seismic activities, the planned state-of- Acquisitions within the Geotechnical the-art capacity expansion will offset the expiring division charters of some vessels. • LoadTest, Inc., United States, is the world’s high end provider of static pile load testing services. LoadTest During the year several complex projects, often involving has subsidiaries in Singapore, South Korea and the several business lines, were successfully completed, both United Kingdom. onshore and offshore. Examples of such projects are described on pages 34 and 35. Acquisitions within the Survey division • VIB Weinhold, Germany, is a supplier of pipeline Around 75% of company activities are related to the oil survey services. The company’s activities comprise the and gas industry. With its broad range of services, Fugro is planning, survey and documentation of transport and involved in many phases of the life cycle of oil and gas pipeline distribution networks, gas plants and power plants for private and public energy companies.

Report of the Board of Management 21 Equipment recovery onboard the R.V. Baruna Jaya I, offshore Timor Leste.

• General Robotics Limited, United Kingdom, is a services. As part of the agreement Fugro has acquired provider of high performance dynamic simulation and the assets of the international aerial survey business visualisation software for the offshore oil and gas which formerly traded under the name ‘KLM – construction industry. Aerocarto’. The assets involved include two survey • Business and assets of Submec Pty Ltd., Australia, aircraft, various sensors and other related equipment. which is engaged in subsea engineering and ROV • Fugro and Deltares, the Netherlands, signed a tooling services. cooperation agreement for the development of • Tenix LADS, Australia, is a leading global provider of knowledge in the field of river delta technology and airborne hydrographic services using lasers to measure subsoil. The objective of the cooperation agreement is water depths. to promote research into issues relating to water and subsoil in deltas and high-value knowledge Acquisitions within the Geoscience development, as well as to develop practical division applications. Deltares is an international knowledge • Data management and storage activities of Divestco, institute in the field of water and subsoil with focus on Inc., Canada. Together with the earlier acquisition of delta technology. similar activities, this acquisition forms the basis for the Canadian data management and storage group. The reasons for acquisitions, are amongst others, to • Sea Development A/S, Norway, a recently established obtain state-of-the-art technology and increase market company for offshore oil spill response services. share. The annual revenue of the acquired companies • Interaction A/S, Norway, specialises in marine in 2009 amounts to EUR 34.8 million. The total cost of the electromagnetic data management and processing. acquisitions completed in 2009 was EUR 37.5 million. The company is known for its Sharkware brand of software products. For the detailed figures on acquisitions that took place in 2009, reference is made to the Annual Accounts on Cooperation agreements pages 105 and 106. • Fugro entered into a global cooperation agreement with Electromagnetic Geoservices ASA (EMGS), Number of employees Norway, the market leader in marine electromagnetic At the end of 2009 the number of employees was 13,482 imaging. The agreement is in effect through 2011. (2008: 13,627). In a number of business units reductions in Fugro has gained full access to EMGS’s marine EM staff (in total some 300) were implemented during the methods for hydrocarbon exploration and production year. This was mainly in General Geophysical Services, and EMGS will gain access to Fugro’s worldwide Information Services and Onshore Geotechnical Services. marketing network and marine operations expertise. These reductions in combination with the addition of The companies have also entered into a non-exclusive 168 staff through acquisitions and hiring of staff in worldwide multi-client cooperation agreement, as business units where market circumstances were well as a non-exclusive global technology licensing favourable, resulted in a decline of 145 employees overall. agreement. As a part of the agreement, Fugro provided The average number of employees during the financial a NOK 150 million secured convertible loan bearing year was 13,587 (2008: 12,977), an increase of 4.7%. interest at 7.00% per annum to EMGS. The loan can at Fugro also works with a large group of experienced and any time be converted into common shares in EMGS at long serving freelance workers who are regularly deployed the conversion price of NOK 5.75 per share until the on a project basis. The use of freelance workers provides maturity date on 2 January 2012. Fugro with the flexibility to respond to variations in • Fugro and Arcadis, the Netherlands, entered into manpower requirements. This strategy clearly paid off in a cooperation agreement under which Fugro will 2009 with a significant reduction in the number of provide Arcadis with aerial imagery and LiDAR freelance workers during the year. This way Fugro’s

22 Personnel data 2009 2008 2007 2006 2005

Average number of employees during the year 13,587 12,977 10,824 9,261 8,121 Revenue per employee (x EUR 1,000) 151.1 166.0 166.5 154.9 142.9 Net revenue own services per employee (x EUR 1,000) 105.1 110.4 110.7 100.6 93.0

Geographical distribution at year-end The Netherlands 947 978 935 871 839 Europe other/Africa 4,369 4,311 3,595 3,126 2,457 Middle East/Asia/Australia 4,411 4,319 3,624 3,007 2,594 North and South America 3,755 4,019 3,318 2,833 2,644

Total at year-end 13,482 13,627 11,472 9,837 8,534

experienced and professional staff could be retained. In order to maintain flexibility, part of the vessel fleet Fugro mainly employs local employees and deploys few capacity is based on long and short term charters, in expatriates. This practice provides flexibility when particular for those activities that can be performed from adjusting the staffing to changed market circumstances, more standardised vessels. which was clearly necessary in certain places in 2009. In 2009 the following changes in the vessel fleet took Despite the global shortage of specialists, Fugro has been place: successful when it comes to recruiting experienced and professional employees. Increasingly this is coordinated Geotechnical division on a global basis. Fugro’s recruitment success is helped by In November the special designed Fugro owned drilling the global spread of its activities and the opportunities vessel Fugro Synergy became operational. One long-term that Fugro can offer to innovative and entrepreneurial vessel charter was terminated. Two vessels were chartered staff. on a (project related) short term basis.

Survey division ■ CApacity PLANNING In the course of the year two older survey vessels (owned) were decommissioned and one vessel was added (owned, As can be seen from the table on page 24, the major part of modification of existing vessel after purchase). Fugro’s growth over the past ten years was organically Mid-year the new build ROV support vessel Fugro Solstice generated. Fugro’s focus is on offering niche services in was taken on charter. Early in 2010 one older chartered related markets by combining state-of-the-art technology ROV support vessel will be replaced by a chartered new and knowledge on a global scale. Continuous build. Furthermore, some long-term charters were development, upgrading and advancement of transferred to short-term charters. technologies are required to maintain a leading position in markets in which Fugro successfully operates, and to achieve strong positions in new markets. Fleet renewal/expansion To optimise efficiency much of the equipment operated Expected start of Owned/ by Fugro is specially developed on the basis of the Name of the vessel Type of vessel operation chartered company’s considerable experience. Maintaining the ownership of such tools is part of Fugro’s strategy. Fugro Searcher Survey Q1-2010 Owned This requires an ongoing long term investment program Geo Caspian Seismic Q1-2010 Charter in key assets such as purpose built vessels and operational Geo Coral Seismic Q3-2010 Owned equipment. Fugro Symphony ROV-support Q1-2011 Owned Fugro Galaxy Survey Q1-2011 Owned

Report of the Board of Management 23 Revenue growth Exchange (in percentages) rate Organic Acquisitions Disposals differences Total

2009 (5.6) 1.1 (0.2) (4.7) 2008 23.4 4.0 (7.9) 19.5 2007 22.9 6.4 ( 0.1) (3.5) 25.7 2006 18.9 6.8 (0.3) (1.8) 23.6 2005 12.0 1.4 (1.1) 2.8 15.1 2004 9.7 16.2 (0.6) (2.7) 22.6 2003 (8.6) 4.9 (9.4) (13.1) 2002 3.4 4.0 (3.4) 4.0 2001 18.4 8.6 0.6 27.6 2000 10.9 8.9 10.6 30.4 Average (2000 – 2009) 10.6 6.2 (0.2) (1.5) 15.1

Geoscience division ■ FINANCIaL In the course of the year the charters of two 2D seismic vessels were terminated as well as the charter of one 3D Revenue and cost development seismic vessel. Furthermore the charters of two seismic In 2009, revenue decreased by 4.7% to EUR 2,053.0 million, support vessels were terminated. One new build 3D compared to EUR 2,154.5 million in 2008. The decrease seismic vessel was taken on charter (Geo Natuna). Towards was partly due to price pressure in market segments the year-end one older 3D seismic vessel (Geo Baltic) was where scarce capacity in recent years changed to ample sold. availability in 2009. Exploration-related activities within the Geoscience division were the worst affected. Scheduled capacity adjustment The table on page 23 summarises the committed Revenue decreased organically by 5.6% and increased 1.1% replacement and the expansion of the vessel fleet as a result of acquisitions. The foreign currency effect was scheduled for the period 2010/2011. 0.2% negative.

Fugro has the option to reduce the fleet by about eight An analysis of the change in revenue is shown in the table vessels in 2010 by not renewing charters or retiring older above. The average revenue growth over a ten year period owned vessels. is for about two thirds organic growth whereas some one third comes from acquisitions. Over a period of ten years Financing of the new owned vessels is covered by existing the effect of exchange variance is minimal. facilities and expected future cash flow. To mitigate the effects of the economic crisis as much as The lease term for some chartered vessels will expire possible, efforts in 2009 were focused on optimising during 2010. Extension of these charters will be operational management and cost reductions. In 2009 considered, also taking into account the development of about EUR 45 million of savings in cost of own services the backlog during the year. Fugro also uses vessels that was made on an annual basis. The effect of terminating are chartered on a project by project short-term basis. the charters of seismic vessels has not been included in this figure. To realise these savings, approximately EUR 10 million of non-recurring costs were incurred.

Third-party costs amounted to EUR 624.4 million in 2009 (2008: EUR 722.3 million); a decrease of 13.6%. The third- party costs as a percentage of revenue were 30.4%, compared to 33.5% in 2008.

24 In 2009, Fugro reviewed the workforce in various activities Net result and locations. Where necessary, reductions in staff Net result decreased by 7.1% to EUR 263.4 million numbers were made and filling vacancies has been (2008: EUR 283.4 million), after deducting third-party reviewed with care. Employees’ pay has been adjusted interests in profits of subsidiary companies. This amounts with restraint to compensate for the effects of the to EUR 3.46 per share (2008: EUR 3.88), a decrease of 10.8%. economic crisis. Fugro continues to invest in building on Measured over recent years, the financial objective of an a safe working environment for all. There will also be no average of 10% per annum increase of earnings per share reduction in training budget, in order to maintain a high has been met. standard of service. In 2009, Fugro continued to recruit young employees to join an experienced team, Due to cost control in 2009, and partly because stimulating the transfer of knowledge. assignments in the first half of 2009 were executed at prices agreed to in the previous year, the net margin The average cost per employee was EUR 48,046, an decreased only slightly in 2009 to 12.8% (2008: 13.2%). increase of 0.7% compared to 2008 (EUR 47,671). As a result of the increase in the average number of employees, the There was no significant impact on the net result of non- total personnel expenses increased on balance by 5.4% to recurring items. EUR 652.8 million (2008: EUR 619.1 million). As a percentage of revenue, this is 31.8%, compared to 28.7% Results from operating activities (EBIT) in 2008. At EUR 367.4 million (2008: EUR 385.7 million), the result from operating activities (EBIT) decreased by 4.7%. Depreciation of tangible fixed assets increased in 2009 from EUR 140.4 million in 2008 to EUR 173.6 million in Since the start of the economic crisis some debtors ran 2009, representing an increase of 23.6%. This increase is a into financial difficulty. This also continued in 2009. The result of the capacity expansion, which took place crisis in Dubai has resulted in an ongoing concern about through 2007 up to and including 2009, mainly in the the collectability of some billed and unbilled revenue. vessel fleet and related equipment and ROVs. Depreciation Customers in other market segments indicate that 2010 was 8.5% of revenue (2008: 6.5%). may not be easy, which could result in write-offs. In 2008, it was decided to create a provision of EUR 25 million for, Other expenses amounted to EUR 249.1 million in 2009 amongst others, these risks. In 2009, approximately (2008: EUR 295.7 million), a decrease of 15.8%. As a EUR 2 million has been charged against this provision. percentage of revenue, these costs are 12.1% (2008: 13.7%). Considering the uncertainties that still exist at year-end Other expenses include a variety of different costs, which 2009, the remaining provision has been maintained. cannot be allocated directly to projects, such as repair and maintenance, occupancy, insurance, etc.

Geographical distribution of revenue* (on 31 December, x EUR 1 mln.) 2009 2008 2007 2006 2005

The Netherlands 134 145 124 114 100 Europe other/Africa 985 1,082 857 610 489 Middle East/Asia/Australia 420 426 351 288 234 North and South America 514 502 471 422 338

Total 2,053 2,155 1,803 1,434 1,161

* Based on the place of business of the operating company that executes the project.

Report of the Board of Management 25 Revenue distribution per division (on 31 December, x EUR 1 mln.) 2009 2008 2007 2006 2005

Geotechnical 536 541 443 371 304 Survey 956 960 852 709 565 Geoscience 561 654 508 354 292

Total 2,053 2,155 1,803 1,434 1,161

EBITDA (2008: EUR 52 million negative). See page 65 of this report The earnings before interest, tax, depreciation of under risk management and page 132 of the annual tangible fixed assets and amortisation of intangible assets accounts under currency risks for exchange rate effects. amounted to EUR 551.1 million in 2009 (2008: EUR 535.2 million). This is an increase of 3.0%. Cash flow In 2009, the cash flow amounted to EUR 456.8 million Exchange rates (2008: EUR 438.9 million), an increase of 4.1%. Cash flow is During 2009, the average US dollar exchange rate defined as the profit for the period attributable to equity increased to EUR 0.72 (2008: EUR 0.68). The average holders of the company plus depreciation, amortisation exchange rate of the British pound decreased further to of intangible fixed assets and non-controlling interest. EUR 1.13 in 2009 (2008: EUR 1.25). The net foreign The expected future cash flow will enable the company to exchange variance in the profit and loss acount remain within the current financing covenants and to amounted to EUR 13.4 million negative in 2009 (2008: comply with the committed investments. The cash flow EUR 25.8 million positive). The positive exchange variance per share equates to EUR 5.99 (2008: EUR 6.01), a decrease in 2008 was mainly related to the effects of the temporary of 0.3%. The financial growth target for the cash flow of on strengthening of the US dollar against the declining average 10% measured over the last few years was amply Norwegian kroner in the second half of 2008. The achieved. exchange differences have been accounted for in the accounts as net financing costs. Investments In the past years, Fugro has invested considerably in the In the balance sheet, valuations were also influenced by expansion of seismic capacity and will conclude this fluctuations at the year-end in the US dollar and the programme in 2010 when the Geo Caspian and the Geo British pound. However, the most important difference Coral will be brought into service. To continue organic was caused in 2009 by the revaluation of subsidiary growth, in particular in the Geotechnical and Survey companies reported in Norwegian kroner (about division, capacity will have to be added in the coming EUR 26 million positive). years and older vessels will be replaced as part of the fleet renewal. The changes in exchange rates had a positive effect of in total EUR 48 million on the equity per 31 December 2009

Results from operating ac- Net result tivities (EBIT) (x EUR 1 mln.) (x EUR 1 mln.)

450 300

360 240

270 180

180 120

90 60

0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

26 Exchange rates (in EUR) 2009 2009 2008 2008 2007 2007 Year-end Average Year-end Average Year-end Average

US dollar 0.69 0.72 0.71 0.68 0.68 0.73 British pound 1.13 1.13 1.05 1.25 1.36 1.46

In 2009, replacement investments were limited to those The decrease of the net interest charge is mainly caused which were absolutely necessary. The 2009 investments by the low EURIBOR/LIBOR interest on which the finan­ can be specified as follows (x EUR million): cing is based. The interest on the extra usage of bank Maintenance capex 70.4 facilities was more than compensated for by the lower Capacity expansion 250.0 base rate. The interest cover (EBIT/net interest expenses) is Movement in assets under construction 48 (2008: 14). This is a high coverage, well above the (mainly vessels and ROVs) 29.3 financial objective of more than 5. Assets of acquisitions 9.9 Taxes 359.6 In 2009, income tax expense amounted to EUR 74.4 million (2008: EUR 94.8 million), a decrease of 21.5%. Each year, Fugro has to invest in order to maintain the The effective tax rate amounts to 21.4% in 2009 existing capacity. In 2009, the maintenance capex (2008: 24.7%). The company strives for a low tax charge amounted to EUR 70.4 million (2008: EUR 87.2 million). through an efficient tax and financing structure. In the table below, an overview of the annual investments The final tax charge depends in part on the geographical for the period between 2008 – 2011 is given, including an spread of the projects that are carried out and the possible estimate for the years 2010 and 2011. The capacity usage of tax losses. expansion for 2011 includes ROVs, the Fugro Symphony and the Fugro Galaxy. Both these vessels will be ready Intangible assets (goodwill) early in 2011. In 2009, the addition of intangible assets resulting from acquisitions amounted to EUR 20.0 million Net finance costs (2008: EUR 76.0 million). The addition is mainly a result The net finance costs amounted to EUR 20.4 million in of the eight acquisitions in 2009. 2009 (2008: EUR 1.4 million). The net finance costs are In 2009, there was a positive foreign exchange difference specified as follows (x EUR million): of EUR 21.3 million (2008: EUR 39.1 million negative) on 2009 2008 the balance sheet valuations of intangible assets. Net interest charge 7.7 27.3 Goodwill is not amortised but is tested at least once a year Rate of exchange differences 13.4 (25.8) for impairments. In 2009, as in previous years, this did not Other (0.7) (0.1) result in adjustments, notwithstanding weaker economic circumstances. 20.4 1.4

(Expected) investments, excluding assets from acquisitions (x EUR 1 mln.) 2008 2009 2010* 2011*

Maintenance capex 87.2 70.4 75.0 100.0 Capacity expansion 235.8 250.0 275.0 150.0

Total investments 323.0 320.4 350.0 250.0 Movement in assets under construction 57.0 29.3 (75.0) (90.0)

Net cash 380.0 349.7 275.0 160.0

* Estimate

Report of the Board of Management 27 Ground Penetrating Radar (GPR) is a geophysical method that uses radar pulses to image the subsurface.

Balance sheet ratios Early January 2010, Fugro entered into a credit Solvency at the end of 2009 was 50.2% (end of 2008: 43.7%). agreement with Fortis Bank Nederland for a facility of The solvency ratio objective is 30 to 35%. This objective EUR 50 million. was amply met. At the end of 2009, the current ratio was 1.2 (2008: 1.1). Gearing amounted to 42% (2008: 51%). The The maturity date for all renewed facilities is 1 April 2012 strong solvency and low gearing underline the company’s and the terms and conditions are basically unchanged healthy balance sheet. compared to the previous agreements with the banking institutions. The interest surcharge is approximately Working capital increased to EUR 140.3 million 150 BPS above the original facilities. EURIBOR is the base (2008: EUR 56.1 million). The increase is mainly caused by for the calculation of interest. a higher value of the seismic data library (EUR 41.3 million), lower use of bank overdrafts (EUR 21.5 million) The total of the long-term available bank financing as and on balance lower tax payable (EUR 23.0 million). per 31 December 2009 amounts to EUR 420 million. Taking into account the new Fortis facility, the current Fugro annually invests in new seismic surveys and balance is EUR 470 million, of which EUR 125 million has geological data at its own risk and expense (multi-client), not yet been used. which is recognised on the balance sheet under ‘Inventories’. Such a data library is normal for companies An agreement was also reached with ING Bank in 2009 for that carry out this type of service. The data library a bank overdraft of EUR 100 million. The total of the contains valuable information that is offered and sold, available working capital facilities amounts to some under licence, to various interested parties and which EUR 425 million. retains its profit potential for several years. Private placement loans have been concluded in 2002 for Virtually no data acquired during or before the financial EUR 20 million and for USD 120 million. The US dollar year 2006 is recognised on the balance sheet. At the year loans are held in the original currency to hedge the net end the net book value amounted to EUR 68.5 million assets on the balance sheet denominated in US dollars. (2008: EUR 27.2 million). Interest on the private placement loans varies between 6.45% and 7.10%. The private placement loans will have to The current market situation for the multi-client data and be repaid in parts in 2012, 2014 and 2017. the selective attitude of potential customers concerning the geographical location of the collected data has been taken into account in the valuation of the data library. ■ DIVIDEND PROPOSAL

The data library’s balance sheet value has increased It is proposed that the dividend for 2009 will compared to the end of 2008. This is mainly caused by a be maintained at EUR 1.50 per ordinary share number of large 3D projects near Australia, for which (2008: EUR 1.50), to be paid at the option of the holder: good pre-commitments were received. This underlines the • in cash, or interest of the oil and gas companies in this specific data. • in (certificates of) ordinary shares If no choice is made, the dividend will be paid in Financing (certificates of) ordinary shares. During 2009, Fugro reached agreement with banks with The proposed dividend equates to a pay-out percentage regard to renewal of the long-term credit facilities. of 44.2% of the net result. See for more details page 10 Furthermore, Fugro reached agreement with BNP Paribas and 11. in the course of 2009 with regard to an additional credit facility of EUR 50 million.

28 companies, irrespective of where they are being made in ■ MARKET DEVELOPMENTS AND TRENDS the field life cycle. In the years to come, large investments will be required to maintain sufficient oil and gas Trends production in the longer term. The world economy has reacted strongly to the financial crisis. The negative effects were felt throughout 2009 and Many of the exploration and development activities, they have spread over many sectors worldwide. especially those related to deepwater projects, take place in the Gulf of Mexico, West Africa and Brazil. Other Through its position in the international markets in regions that continue to be very active are the Middle which it operates and the mix of its clients, Fugro was East, the northern part of the North Sea and parts of Asia, reasonably protected against, but not immune to, the India and Australia. There is also a continuing interest in consequences of the worldwide crisis. detailed reservoir information from existing fields to enable production levels to be maintained for as long as The oil and gas market possible, and to extract the maximum volume of available The oil price per barrel fell sharply in the first quarter of oil and gas. 2009 and gradually recovered over the year to around USD 75. External reports indicate an expected oil price of Demand for gas is creating a global growth market. The USD 80 or higher in the longer term. Smaller oil demand is increasingly met by production of liquefied companies that are dependent on external financing for natural gas (LNG), which can be transported over sea. the exploration and development of their fields, Fugro is carrying out work for a number of LNG terminals experienced problems with regard to their business now under development in various parts of the world. model, and projects for these clients suffered delays. The High energy prices are making the development of gas share of Fugro’s revenue for this category is relatively fields located at considerable distance from the user small. National oil companies and large international markets more attractive. This is especially applicable in players have continued their developments in order to be the Middle East where there are considerable gas reserves able to mitigate future production decline. However, they within transportation distance of India, China, Japan and are implementing cost reductions, amongst others by Europe. Large-scale developments are also taking place in putting price pressure on suppliers. countries that have been exporting gas for some time, such as Australia, Nigeria and Indonesia. This will The indications are that during 2009 investments by the reinforce the trend towards the creation of a global gas oil and gas industry have declined by 15% to around market and could result in gas remaining an attractive USD 395 billion. The entire market sector, including energy source for many years to come. Fugro, was affected by this decline. About 75% of Fugro’s revenue is related to oil and gas. External publications indicate that oil companies base their economic viability calculations for most of their According to recent external market reports, investments larger projects on a price of oil well below the current by oil and gas companies will increase in 2010 by 11% to level of USD 75 per barrel. Considering the long duration around USD 440 billion worldwide. For the so-called from start to finish of these kinds of projects and the international market, which is an important part for current trend in the oil price, Fugro anticipates that its Fugro, an increase of 10% to USD 337 billion is expected. services will continue to be in demand in 2010 and the years beyond. Increasingly, as a consequence of implementing its strategy to provide a broad range of related services, Fugro The market for infrastructure projects is involved throughout almost the entire life cycle of oil Infrastructure related activities accounted for and gas fields. This cycle can last for several decades. approximately 18% of Fugro’s revenues in 2009. It starts with the search for fields and continues with The uncertain market situation is noticeable in a number investigations and surveys related to the design and of these market segments. The residential market, for construction of the structures required to bring new fields instance, has slowed down in several countries. This into production, to maintaining and improving market is less important to Fugro. Fugro is concentrating production from existing fields and, finally, more on large infrastructure projects. In times of decommissioning. Fugro will, therefore, be able to benefit economic stagnation, (local) governments often accelerate from increases in the investments by the oil and gas such projects to boost the local economy. Fugro provides a

Report of the Board of Management 29 number of services in this part of the market such as laser technology for governmental authorities and other aerial surveying, water management, advice on public bodies. Approximately 4% of annual revenue is foundations and road maintenance. In order to be generated by these segments. In general, these activities involved in large infrastructure projects as early as are more region-specific and related to the sector’s possible, Fugro makes early contact with the key players economic activity. in the development of these projects.

In some countries, like the USA, stimulus programmes are ■ Backlog now generating projects in which Fugro is participating. At the beginning of 2010 the backlog of work to be carried Fugro undertakes contracts associated with airports, land out during the year amounted to EUR 1,364.0 million reclamation, (LNG) harbour expansions, levees, tunnels, (beginning of 2009: EUR 1,600.4). The proportion of and major building and construction works all over the definite orders is 53% (beginning 2009: 66%). The backlog world. The company has strengthened its market position calculation is based on end-of-year exchange rates in in this segment, as it has increasingly positioned itself EUR and is 14.8% lower than at the beginning of 2009. as a supplier of integrated solutions. This fulfils the The backlog has decreased because of present market customer’s preference for handing over the circumstances which cause the delay in start up of new responsibilities for a broad range of data acquisition projects, last minute awards and lower prices which affect and consultancy activities to a single, independent the volume of the backlog. This is mainly the consequence service provider. of the availability of sufficient capacity unlike in previous years. This is in particular the case for the marine seismic Mining activities. At year end the order backlog of work to be The majority of Fugro’s mining related revenue comes carried out covers eight months. The exchange rates did from the exploration sector. This sector drastically not materially influence the backlog compared to the reduced the level of investment in 2009. The private sector beginning of 2009. component is driven by the economic value of new

sources of metals and minerals. This is affected by mineral Development of Book value prices and by the planning assumptions and planning goodwill* Goodwill as of 31 (EUR ­mln.) December horizon of the mining companies. As the financial markets entered into difficulty, potential sources of 1988-1993 35.4 0 funding from equity and debt providers for explorers 1994 40.3 0 came under severe pressure. As a result of this, a 1995 5.2 0 significant decrease was seen in the activity of mining 1996 3.0 0 ‘juniors’. This is expected to continue until the capital 1997 18.1 0 markets recover. It remains to be seen for how long 1998 16.9 0 mining ‘majors’ also curtail their exploration activity. It is 1999 35.3 0 expected that the mining activity will remain slow in 2000 37.4 0 2010, but governmental and semi-governmental 2001 242.8 237.9 organisations may continue to carry out some projects. 2002 3.2 190.9 Such projects are regional mapping of geology and earth 2003 68.2 253.1 structures which are viewed as a strategic investment by 2004 22.9 274.4 governments and semi-governmental organisations such 2005 8.3 289.2 as international aid groups. These projects tend to be less 2006 59.4 347.3 dependent on short-term fluctuations in prices of 2007 47.3 381.6 minerals. The mining related activities accounted for 2008 76.0 418.5 3% of Fugro’s revenue in 2009. 2009 20.0 459.7

Other market segments Total 739.7 Fugro not only supplies services to the aforementioned markets but also to a number of other niche markets. * Up until 2000 goodwill was deducted directly from the These services include precise positioning for machine shareholders’ equity; the goodwill under IFRS has been guidance in agriculture, route surveys for offshore recalculated as of 31 December 2002. telecommunication cables, and airborne mapping using

30 Backlog at start of the year (for the next twelve months) (x EUR 1 mln.) 2010 2009 2008 2007 2006

Geotechnical Onshore Geotechnical 191.9 168.7 152.7 147.1 97.5 Offshore Geotechnical 199.3 174.6 142.6 98.3 69.0

391.2 343.3 295.3 245.4 166.5 Survey Offshore Survey 388.3 436.0 354.7 334.9 298.2 Subsea Services 244.5 273.0 207.5 168.6 96.6 Geospatial Services 83.6 95.8 85.9 40.5 34.3

716.4 804.8 648.1 544.0 429.1 Geoscience Seismic Services 164.1 356.8 399.6 256.3 125.0 Information Services 45.5 34.7 53.1 37.7 45.7 General Geophysical Services 46.8 60.8 62.4 63.0 47.8

256.4 452.3 515.1 357.0 218.5

Total 1,364.0 1,600.4 1,458.5 1,146.4 814.1

Backlog comprises revenue for the coming twelve months and includes uncompleted parts of on-going projects and contracts awarded but not yet started (approximately 53% of the total) and projects that have been identified and are highly likely to be awarded (approximately 47% of the total).

■ Postbalance sheet date events in a reduction of the global E&P investments of some 15%. External reports indicate that these investments will There are no postbalance sheet events to report. increase in 2010 by over 10% to about USD 440 billion, not far short of the peak in 2008 of USD 450 billion. This increase is based on a forecasted average oil price ■ OUTLOOK of USD 70 per barrel, versus an average price of just over USD 58 per barrel in 2009, and around USD 68 per barrel The oil and gas industry is Fugro’s most important market in 2008. The indications are that the NOCs (National sector, representing a 75% share of the company’s Oil Companies) will increase their investments and that revenue. The price of oil as such has no direct influence on companies which slowed down their plans in 2009 due the services but can certainly affect the behaviour of to reduced cash flows are now also expanding their Fugro’s clients with regard to their investments. activities. A relatively strong increase is expected in the spending on exploration work such as marine seismic, The worldwide recession led to a slowdown in the demand which was one of the segments that saw a rapid decline for oil and gas in the second half of 2008 resulting in a in demand when the crisis started. sharp drop in the price of oil from peak levels of USD 147 per barrel during mid 2008 to below USD 40 per barrel in The investment horizon is an important issue and must the early part of 2009. With the world economy slowly take account of the fact that for new larger offshore oil crawling out of the recession, demand for oil and gas is and gas fields, the time that passes between the decision gradually being restored, resulting in a recovery of the oil to develop a field and the actual start of production is price to around USD 75 per barrel at the start of 2010. The several years. Worldwide, the decrease in production from oil and gas industry responded to these developments in existing fields through depletion is 6 to 8% annually. 2009 with cost cutting and deferral of projects resulting

Report of the Board of Management 31 Considering the lead time required to put new fields into As there is still uncertainty about the duration of the production, the need for continuous investment in worldwide recession and the pace of recovery, Fugro production capacity has not been greatly affected by the continues with measures to control cost such as: current economic situation. Fugro’s involvement in the • restrictions on new investments, unless profitable in subsea servicing of installations (inspection, repair and the short term or strategically important; maintenance or IRM) has gradually increased over the last • flexibility in hired capacity, such as chartered vessels few years and these activities are less sensitive to oil price and freelance staff; fluctuations. • further optimisation of operational efficiency. In 2010 Fugro will fully benefit from the cost reduction The main part of Fugro’s services to the oil and gas measures taken in 2009. industry are provided by Offshore Geotechnics, Offshore Survey, Subsea Services, Information Services and Seismic When the recovery of the world economy gains further Services. momentum, the sectors on which Fugro focuses, in particular those of energy, construction, transport, In other segments where Fugro is active, like larger minerals and water, should soon start to offer good infrastructure projects, there are indications of the start opportunities for further growth. of a recovery during the course of the coming year, partly supported by stimulus programmes by governments, as in Expansion and broadening of activities through the United States. These activities include transportation acquisition will remain part of the strategy. More realistic projects (such as roads and ports), coastal protection, company valuations than has been the case in some pipelines and water management. The onshore and sectors in recent years may enhance these opportunities. nearshore geotechnical activities, as well as aerial mapping activities in Geospatial, are involved in this. Based on recent developments there are signs of a gradual The decentralised organisational structure, with local improvement in some of the market sectors in which operating companies, enables Fugro to respond quickly to Fugro is active. This is supported by some increasing changes in demand for infrastructure services that have a tender activity for exploration work for oil and gas at sea national or regional character. and a somewhat improving backlog compared to the situation during the last part of 2009. This would indicate Due to the sharp fall in prices for minerals and the heavy that there are less uncertainties than a year ago, but we dependence of smaller clients on external financing for are starting the year 2010 with a lower backlog and in projects, a strong decline in the demand for mineral a tighter pricing environment. Also the relative harsh exploration services occurred in 2009. This decline was winter in the northern hemisphere has delayed partly compensated by applying survey methods that were construction related work in some countries. developed for the mining industry to search for oil and gas. The demand for surveys to locate new mineral In 2009 Fugro produced record first half year results on resources is expected to recover only slowly. the basis of the backlog roll-over from 2008, partly still at pre-crisis rates. It is unlikely under the present conditions In addition to the influence of aforementioned that this can be matched in the first half of 2010. We uncertainties in market developments, the exchange rates expect that both revenue and net profit margin will be of the US dollar and the British pound compared to the somewhat lower over the first half of 2010 compared to Euro are important. The larger parts of Fugro’s revenue 2009. and cost are in the same currency. However, the translation to Euros could be of influence on the In view of the continuing uncertainties and volatility in reporting of results, which is in Euros. Furthermore, market developments and given the short-term nature of political instability can lead to stagnation of projects. a number of our projects, as in previous years, we will first publish a quantitative forecast for the entire year in The economic developments over 2009 resulted in less August 2010, at the time of the publication of the 2010 tension in the labour market and more manageable costs half-yearly report. of services by third parties, such as transport of equipment and short-term charters of vessels.

32 Board of Management declaration pursuant to article 5:25c of the Financial Markets Supervision Act in the Netherlands To the best of the Board of Management’s knowledge the annual accounts (pages 80 to 154) give a true and fair view of the assets, liabilities, financial position and profit or loss of Fugro N.V. and the companies included jointly in the consolidation, and the annual report gives a true and fair view of the situation on the balance sheet date and the business development during the financial year of Fugro N.V. and the Group companies for which the financial information is recognised in its annual accounts. The principal risks and uncertainties with which Fugro N.V. is confronted are described in this annual report.

Leidschendam, 4 March 2010

K.S. Wester, President and Chief Executive Officer A. Jonkman, Chief Financial Officer P. van Riel, Director J. Rüegg, Director A. Steenbakker, Director

■

Report of the Board of Management 33 Electro magnetic survey from helicopter in Canadian Arctic.

■ i M portant and interestin g c o n t r a c t s

• Africa – Several 3D seismic acquisition contracts have been awarded for projects offshore East and West Africa; commencement of projects will be in 2010.

• Alaska – Fugro has entered into an agreement with Statoil USA E&P, Inc. for the acquisition and processing of a 2,400 square kilometre 3D marine seismic survey on Statoil’s leases in the Chukchi Sea.

• Australia – The Department of Sustainability and Environment of the State Government of Victoria has awarded a contract to Fugro to supply geospatial services to support the department’s third iteration of the Index of Stream Condition project. The project requires aerial acquisition of high resolution LiDAR and 4 band imagery data along 26,000 km of the Victorian river network.

• Australia • A geotechnical survey for a new energy related facility in Australia. • A marine survey including a geotechnical site investigation offshore Australia. • Several 3D multi-client seismic surveys offshore Australia, for which there is great interest from the oil and gas industry resulting in high pre-commitments.

• Australia – a contract by Woodside Energy Ltd to undertake a year-long metocean study along the proposed pipeline route for the Browse LNG Development which will run from the gas fields to the planned Kimberley LNG Precinct at James Price Point.

• Canada – Fugro entered into a contract for the acquisition of marine 2D multichannel seismic and bathymetric data in water depths ranging from 2,500 to 4,000 metres in the Labrador Sea, offshore Eastern Canada, in support of Canada’s programme to define the outer limits of its extended continental shelf under the United Nations Convention on the Law of the Sea (UNCLOS). The work is awarded by the Canadian Government.

• France – a geotechnical survey for the extension of the port in Le Havre, France, for the Harbour Authorities.

• Hong Kong – The Highways Department of the Government of the Hong Kong Special Administrative Region has awarded Fugro a contract to carry out a major nearshore site investigation for the Hong Kong Boundary Crossing Facilities (HKBCF) associated with the new Hong Kong–Zhuhai–Macao Bridge.

• Mexico – a large, multi-site high resolution geophysical and geotechnical survey for Mexico’s national oil company PEMEX.

• Papua New Guinea – a significant contract by Nautilus Minerals Inc. to provide exploration services for seabed mining offshore Papua New Guinea and the Solomon Islands.

34 • Peru – Petrobras Peru awarded Fugro a contract for an airborne gravity gradient and magnetics survey. The contract includes data acquisition, processing and interpretation and will comprise a total of 70,000 line kilometres of data acquisition over the Peruvian Amazon basin. The gravity data was acquired using Fugro’s unique FalconTM gravity gradiometry technology.

• Saudi Arabia – a project in Saudi Arabian waters in the Red Sea was carried out for a major port construction project. The survey project included a significant hydrographic survey using laser scanning by aircraft.

• South Korea – a geotechnical survey for the presence of gas hydrates for KNOC (Korea National Oil Corporation). This will be performed by the Fugro Synergy.

• Trinidad and Tobago – a contract to provide vessel, ROV, inspection and subsea engineering services to BP Trinidad and Tobago in support of its oil and gas facilities offshore Trinidad.

• Turkey – Fugro has been awarded a contract by the joint venture NÖMAYG in Turkey for site investigations and consultancy work for a major infrastructure project on the Izmit Bay Bridge in Turkey. The contract involves onshore and offshore geophysics, drilling for samples, seismic studies, geological mapping, geotechnical laboratory testing and earthquake engineering.

• United Kingdom – Thames Water Utilities Ltd and Fugro entered into a marine site investigation contract for a geotechnical survey in and across the river Thames. The purpose of these investigations is to gather data required to deliver the Thames Tunnel, a major new environmental project that is needed to reduce the risk of untreated sewage overflowing from London’s sewers into the river Thames after rainfall.

• United States – a contract from the State of California, Department of Transportation (Caltrans) to provide highway pavement structure data collection and inventory services. The data will be used to create a geographically referenced inventory of construction details including pavement layer thicknesses and material types for the entire state highway network (82,000 kilometres).

• United States – Rutherford County, Tennessee, awarded a 5-year geospatial services contract to provide mapping services.

Report of the Board of Management 35 ■ Geotechnical division At the beginning of 2009, revenues from the Middle East, and especially from Dubai, decreased. The Middle East The Geotechnical division’s revenue decreased by 1% situation improved gradually over the year due to to EUR 536 million (2008: EUR 541 million). Results increased activity in Abu Dhabi and Qatar. The activities from operating activities (EBIT) was EUR 94 million in Saudi Arabia and India were hardly affected by the (2008: EUR 95 million) corresponding to 18% (2008:18%) economic crisis. EBIT margin on revenue. In a somewhat better Far Eastern investment climate, In 2009, Fugro continued its strategy to realise business activities in China and Hong Kong improved in 2009 in growth in existing and new regional markets. Offices have comparison with 2008. Fugro’s position in this market is been opened in Ho Chi Minh City (Vietnam), Kolkata and illustrated by an award to perform a large soil Chennai (India), and cooperations have been established investigation for the new Hong Kong–Macao bridge. with companies in Central Europe. A strong backlog enabled the onshore geotechnical services to improve its Offshore Geotechnical performance for 2009 was market position for site investigations in coastal waters. consistent with 2008 with minimal impact from the current adverse economic climate. A reduction in work Pavement management activities were under pressure the has been experienced in the shallow water gas-driven entire year as a result of reduced government spending. areas while a larger proportion of the revenues have been Western European markets were, on average, stable generated from deepwater work. The market has been despite the difficult circumstances. Reduced activities dominated by the large international and national oil here were well compensated by Fugro’s involvement companies. Any work reductions have been more in soil investigations for coastal wind farms in Germany prevalent from the independent oil and gas companies. and other activities in Central Europe. Major deepwater projects were undertaken in all geographic regions of the world, with particularly large A good example of Fugro’s involvement in large, complex projects in South East Asia, Gulf of Mexico and West projects in new regions is the contract for investigations Africa. and consultancy work for the Izmit Bay Bridge in Turkey. GeoConsulting affiliates have been established in In 2009 economic stimulus funds announced by the US Houston, Wallingford and Singapore with 2009 government contributed to a limited extent to activities representing the start of operations in all offices. in the USA. Involvement in larger international oil and GeoConsulting combines the technical expertise from gas projects and geotechnical advice on construction offshore survey and geotechnical to consolidate licences for nuclear power stations in combination with worldwide expertise under one operating entity. effective cost mitigation measures resulted in a stable The objective is to provide clients with high end advice contribution from US activities. A recent project award on the foundation design of complex projects such as from the California Department of Transportation offshore installations in frontier deepwater regions. (Caltrans) to provide services to collect data for highway maintenance may indicate that investments are on the increase.

Key figures Geotechnical (amounts x EUR 1 mln.) 2009 2008 2007 2006 2005

Revenue 536 541 443 371 304 Results from operating activities (EBIT) 94 95 78 58 46 Average invested capital 358 254 173 129 105 Depreciation of tangible fixed assets 29 24 19 14 10

Results from operating activities (EBIT) as a % of revenue 18 18 18 16 15

36 Fugro Synergy during sea trials in the Hardanger Fjord in Norway.

The new multi-purpose vessel, Fugro Synergy, was launched during the last quarter and will serve to expand the services offered by the existing fleet. The objective of the Fugro Synergy is to provide drilling services using both standard and new technology at depths greater than Fugro’s current geotechnical investigations. The Fugro Synergy gives the opportunity to work more efficiently.

Research is a continual process to improve and enhance the data collection in deepwater. Two of Fugro’s newer tools, Smart PipeTM and SurfTM, were utilised for a deepwater pipeline design project where the seabed sampling and testing were critical for developing design criteria. The industry is changing to subsea installations for the production of oil and gas, which will create new types of structures and design issues that are being addressed through newly developed seabed soil investigation equipment and methods.

The increase in the average invested capital is largely due to the Fugro Synergy becoming operational in the course of 2009.

Report of the Board of Management 37 ■ Survey division Subsea Services was established as a separate business line within the Survey division on 1 January 2009 to provide In the year under review the Survey division achieved increased market focus while maintaining Fugro’s flat revenues of EUR 956 million (2008: EUR 960 million). operating structure with short reporting lines to top The results from operating activities (EBIT) increased management. Subsea Services operates globally using a by 5% to EUR 246 million (2008: EUR 235 million). This comprehensive fleet of ROVs and specialist ROV support equates to an EBIT margin of 26% of revenue (2008: 24%). vessels to deliver a wide spectrum of subsea services, also mainly to the oil and gas industry. Supported by in-house The Survey division operates primarily in the oil and gas engineering capabilities, these services include support of industry which, in 2009, constituted approximately 80% drilling and well completion, offshore construction of revenue of the division. The main activities include support, inspection, repair and maintenance and remote survey and positioning services offshore, sub-sea surveys subsea intervention. Subsea Services works in close and intervention using Remotely Operated Vehicles (ROVs) cooperation with Offshore Survey and Offshore in support of oil and gas field exploration, development, Geotechnics to provide fully integrated project solutions. production and abandonment and positioning, mapping and survey services onshore. While most offshore Geospatial Services offers a range of survey and mapping operations relate to the oil and gas sector, the activities on services using terrestrial, aerial and space based sensors to land are principally driven by government mapping acquire geospatial data which is processed to create contracts and infrastructure related projects. By year-end geospatial information for a variety of applications. the Survey division operated 20 survey vessels, 5 ROV The demand for specialised geospatial services continued vessels, 130 ROVs, 8 AUVs and 30 survey aircraft. to grow in 2009, particularly from government agencies, natural resource industries and from clients involved Offshore Survey operates a global network of positioning with infrastructure. Spurred on by the free availability reference stations which are used for the precise of maps and earth imagery on the internet, there is a positioning of vessels used in support of the oil and gas growing trend to represent and visualise our fast industry. For the development of field infrastructure changing world through detailed maps, aerial imagery Fugro provides geophysical investigations, often in and 3D models. Consequently, there is an increasing conjunction with the Geotechnical division, resulting demand for ever more accurate and up-to-date geospatial in comprehensive study reports for design purposes. data. Other services to the offshore industry are meteorological and oceanographic studies, provided through a number of global offices. Offshore Survey is increasingly involved in hydrographic charting for government authorities and applying its expertise in route surveys to the telecommunication industry.

Key figures Survey (amounts x EUR 1 mln.) 2009 2008 2007 2006 2005

Revenue 956 960 852 709 565 Results from operating activities (EBIT) 246 235 205 146 97 Average invested capital 578 497 423 332 249 Depreciation of tangible fixed assets 49 43 37 29 25

Results from operating activities (EBIT) as a % of revenue 26 24 24 21 17

38 Downloading oceanographic data from Fugro Oceanor wavescan buoy, Nyhamna, Norway.

The global financial crisis had little impact on the The new ROV support vessel, Fugro Saltire, started the offshore Survey activities in the early part of 2009. Most year with a geotechnical drill rig installed for a project in major international and national oil companies the south Atlantic followed by a busy construction maintained their investment plans and thanks to a solid support season in the North Sea. Fugro also took delivery backlog at the time, the year started strongly. As the year of the new build Fugro Solstice (chartered vessel) in June progressed, project delays and cancellations became more for ROV operations out of Singapore. After an initial common. Furthermore the drive by clients to reduce costs inspection programme in the Philippines, the vessel led to increased pricing pressure. Good performances ended the year on a 5-month contract for mineral came from Brazil, West Africa, the Middle East and the exploration services near Papua New Guinea and the USA. An interesting project in frontier areas in the Solomon Islands. Chukchi Sea for survey and geotechnical work was won through GEO LLC in Alaska, which company was acquired In general, Geospatial Services continued to migrate in 2008. A third deep water AUV was added to cover the towards more specialist higher margin services in 2009. expected growth in the Southeast Asian market. The market for geospatial services in the USA remained stable with mapping work for the government sector and Acquisitions included Tenix LADS, an Australian marine infrastructure projects continuing at normal levels, LiDAR operator, Weinhold Engineering (a specialist helped by stimulus funding towards the year-end. Fugro’s pipeline survey company active in Germany), General unique GeoSAR radar mapping technology was used to Robotics Limited (UK based and provider of ROV dynamic successfully complete a number of projects in South simulation and visualisation software) and the business America with good results. In Europe, market conditions and assets of Submec Pty Ltd (Australian provider of weakened slightly over the course of 2009, particularly in subsea engineering and remote intervention tooling). the UK and Ireland. Nevertheless, Fugro was able to Opportunities to acquire geospatial assets (survey aircraft expand its business in Europe through a combination of and sensors) at favourable prices were also taken. asset acquisitions and organic growth. In the Middle East, geospatial activities felt the impact of projects delayed by Subsea Services business performance was quite mixed clients as a result of the global downturn. Meanwhile, the around the world. A very strong performance was Australian market for geospatial services shows clear achieved in Brazil while Europe, Africa and the Middle signs of a recovery, giving a positive outlook going into East region showed a steady performance. The Asia Pacific 2010. However, during the year some capacity in certain operations had a difficult year, with that region parts of the operations had to be reduced, notably for responding very quickly to the oil price drop and global onshore survey services in Western Canada. recession at the end of 2008. The increase in the average invested capital results largely from the additional ROVs.

Report of the Board of Management 39 ■ Geoscience division Fugro’s policy to operate a flexible fleet, by balancing ownership with chartering, enabled Fugro to terminate In 2009 the Geoscience division achieved a revenue of three charters in 2009. Also one of the older vessels has EUR 561 million (2008: EUR 654 million). been sold. The reduced performance in seismic Results from operating activities (EBIT) decreased by 31% acquisition has been partially offset by positive results of to EUR 106 million (2008: EUR 154 million). This equates to multi-client seismic sales which were particularly strong an EBIT margin on revenue of 19% (2008: 24%). in the second half of the year. The introduction of high end 3D vessels in Fugro’s fleet The Geoscience division provides a uniquely broad has also supported entry into the 3D multi-client market spectrum of data acquisition, processing, interpretation where over 2009 several strongly pre-committed 3D multi- and data management services to global oil and gas and client projects have been developed. In 2010 the final two mining industries. The division’s activities are mainly seismic vessels of the fleet renewal/extension plan will focused on exploration work. Both in oil and gas and start operations, providing Fugro with one of the most mining, the data acquisition segment, which accounts for modern high capacity 3D fleets, in the world. the majority of the revenue, was under pressure over the year. In the oil and gas sector prices stabilised in the The demand for high end geologic, geophysical second half of 2009 and tendering activity increased interpretation and reservoir modelling services and towards the end of the year. In all business areas that were software products provided by Information Services impacted by the downturn cost reduction programmes remained strong throughout the year. Performance of were carried out by reducing staff, rationalisation of the multi-client geologic product sales was satisfactory. operation and reductions of suppliers’ costs where Data management capabilities were expanded through possible. the acquisition of the data management and storage activities of Divestco in Canada. Through integration with The total revenue in 2009 for Seismic Services amounted the existing business, a Canadian data management and to EUR 403 million (2008: approximately EUR 465 million). storage group was built with a strong market position and Marine seismic acquisition, which is mostly applied to with technology for on and near-line electronic data support oil and gas exploration, experienced a drop-off in storage. activities in 2009 due to the weak oil price. In addition the global capacity of the seismic fleet increased which led to over-capacity and subsequently to price pressure and a shorter lead time for the award of projects. As a result the order backlog reduced. In the first half year results were also impacted by some seismic equipment related start-up issues on the new seismic vessels.

Key figures Geoscience (amounts x EUR 1 mln.) 2009 2008 2007 2006 2005

Revenue 561 654 508 354 292 Results from operating activities (EBIT) 106 154 115 66 44 Average invested capital 703 583 456 353 295 Depreciation of tangible fixed assets 32 28 23 17 18

Results from operating activities (EBIT) as a % of revenue 19 24 23 19 15

40 Electromagnetic airborne survey system, High Lake Camp, Nunavut, Canada.

General Geophysical Services provides airborne, ground and marine electric, electromagnetic, magnetic and gravity data acquisition, processing and interpretation services to clients in the mining and oil and gas industries. General Geophysical Services was hit by the downturn in mining, which has impacted airborne data acquisition in particular. An exception was the application of the Falcon airborne gravity gradiometry technology purchased from BHP towards the end of 2008. Over 2009 this technology has been successfully introduced into the oil and gas sector, and has helped to partly mitigate the decline in mining activity.

A new development in 2009 was the entry into the marine electromagnetic market by entering into a strategic alliance with EMGS of Norway, the leading provider of these services. The agreement was backed by a secured convertible loan of Fugro to EMGS of NOK 150 million (EUR 18 million). A further development in this area was achieved with the acquisition of Interaction A/S in Norway, who specialises in the provision of marine electromagnetic data management, quality control and processing software and services.

The increase in average invested capital mainly relates to additional marine seismic equipment.

Report of the Board of Management 41

Wide spectrum of services

A selection of Fugro’s services Fugro provides a wide range of services and has a long history of innovation. Its talented technical professionals continuously develop technology and improve equipment to meet customers’ demands in different market sectors and to offer speci c solutions to often new problems.

A full survey of all Fugro services would be too long, so we therefore offer a  avour of our services with the help of some examples. These are services that, through recent development work, contribute to more accurate measurements (AUV) and more advanced data collection (GeoSAR and electromagnetic imaging), cost savings, infrastructure improvement (pavement management) or to the extraction of non-conventional energy sources (Fugro Synergy). Also remotely operated tailor-made solutions are provided (real-time monitoring with Star x.NG). GeoSAR mapping technology Mapping through cloud cover and vegetation

Detailed topographic mapping in equatorial regions and high latitudes used to be very diffi cult and time consuming. For decades, cloud cover and dense vegetation confounded traditional data acquisition technologies, resulting in a legacy of outdated, inconsistent, and incomplete mapping coverage. This lack of geospatial data has real implications when it comes to critical issues like resource development, national security, aeronautical navigation safety, and disaster preparedness. Working with governments and private-sector companies, Fugro is overcoming these mapping challenges with GeoSAR, a one-of-a-kind airborne radar mapping system.

Dual band The 3 meter X-band image shows the re ective surface of the area, while the 5 meter P-band image reveals both natural and man-made features (fences, power lines, roads) beneath the foliage.

X-Band P-Band Unique and effi cient Exceeded expectations Owned and operated exclusively by Fugro, In the summer of 2009, Perenco required GeoSAR is the world’s only radar mapping up-to-date topographic mapping for a pro- system that simultaneously maps above and posed oil pipeline route in northern Peru. below the tree canopy. This unique capability The data was needed for a number of func- is made possible by a radar con guration tions, including geological interpretation, that images the ground using two separate slope analysis, and pipeline planning. Given frequencies, X- and P-band. During an air- a dif cult landscape of thick forests and borne mission, the shorter X-band wavelength mountainous terrain, as well as an aggressive penetrates clouds, but re ects off the top of project schedule, Perenco broke with conven- features like trees, foliage and buildings. tion and opted to use GeoSAR over traditional The longer P-band wavelength penetrates airborne mapping technologies. It was a move clouds and foliage, for accurate mapping of that paid off. Fugro acquired and processed the terrain. Together, these contrasting data- the data in record time and met all accuracy sets support ef cient topographic mapping and schedule requirements, while delivering over large areas of mixed land cover. topographic mapping products that exceeded the expectations of Perenco’s project Range of data applications engineers. Since 2002, over 900,000 square kilometers were mapped using GeoSAR. While project Moving forward, Fugro plans to build on the deliverables are primarily used to support success of this project for oil and gas devel- large-area base mapping programmes, opments. By answering customer needs for Fugro’s in-house radar engineers and scien- geospatial data in dif cult to map regions, tists are expanding the current range of data GeoSAR is providing new business opportuni- applications to include solutions for forestry, ties within one of Fugro’s most important hydrology, and oil and gas transport and client sectors. production, amongst others. A recent project with the oil and gas company Perenco demon- strates this potential.

Perenco pipeline Peru Highly configurable offshore survey software The real world in a measurable way

Many of the services that Fugro provides are specialist or even unique, and often the software that is required to provide these services is not commonly available. It is therefore that much of Fugro’s software is developed in house and is the reason why an extensive software development and support capability is maintained. Starfi x.NG which provide the operator with real-time The latest incarnation of Fugro’s offshore monitoring of ship movements. The software survey software is called Star x.NG where NG has been developed as a system that almost stands for ‘Next Generation’. These computer operates as a video game; the main differ- programmes are highly specialist in nature ence being that the computer displays do not and include much of the experience that Fugro show fantasy, they show the real world in a has built over the many years that it is active measurable way by using the input of a multi- in this business. tude of sensors, measurement tools and positioning systems that are installed on The Next Generation of software is in many vessels. As requirements vary from vessel ways fundamental for all Fugro’s survey activi- to vessel and from project to project, the ties. It comprises a wealth of intelligent tools software is made to be highly con gurable which enable accurate and ef cient collection to cater for these different environments. of complex data to provide clients with high The computer systems provide in fact the glue quality information. A very important aspect that links all these systems together and of the software is its visualisation capabilities does that in a way that is comprehensible to the human eye.

Fugro Discovery Electromagnetic imaging EM data improves confi dence

Marine electromagnetic (EM) The EM method uses electromagnetic energy imaging is an exciting to map resistivity distributions, potentially technology and emerging tool identifying responses associated with hydro- in the search for hydrocarbons carbon reservoirs lying beneath the seabed. offshore. Unlike seismic surveys, which use acoustic In April 2009, Fugro entered energy to locate promising geological struc- into a global alliance with tures, EM responds directly to certain physical Electromagnetic Geoservices properties associated with the presence of ASA (EMGS) – the established hydrocarbons. Where seismic methods indi- market leader in the provision cate the presence of a suitable structure, of marine EM services. In the EM data provides additional input to help alliance EMGS will offer rank the target with respect to hydrocarbon instrumentation and methods prospectivity. to complement Fugro’s offshore hydrocarbon exploration and production projects.

Recovering an EM source Processing and modelling include inversion of EM data to generate maps, cross sections and 3D volumes, showing the location and depth of resistive bodies, including possible hydrocarbon targets. Combined with other data, this information allows drilling locations to be selected by our clients in the most promising or prospective areas, or target reservoirs to be mapped with greater clarity.

How it works A powerful source towed close to the seabed emits low-frequency EM energy. Grids or lines of seabed receivers detect the energy that propagates through the subsurface. Resistive bodies in the subsurface, such as hydrocarbon reservoirs, guide energy from the source to the receivers. Processing and modelling of EM data show the location and depth of resistive bodies. The expanding world of Fugro’s AUVs Smart tools, smart solutions

Fugro owns and operates eight autonomous underwater vehicles (AUVs) and while there are various military and government research establishments which operate AUVs, Fugro is the world’s leading commercial operator of these smart tools.

Accurate measurements Several Fugro AUV vessels are equipped with To accurately measure the ocean oor it is a system that is capable of launching large best to use tools that are as close to the heavy duty deep water systems. seabed as possible and that are precisely navigated. In the traditional way this is done The AUV technology allows for seabed sur- by towing a hydro dynamically shaped body veys in areas that were previously not within behind a vessel that contains the sensors reach. The large systems often work in oil and that are required to do the seabed measure- gas  elds prior to drilling activities to investi- ments. These methods are adequate in shal- gate the suitability of the seabed for the low water but become increasingly ineffective installation of well heads, pipelines and other when the water depth increases. Nowadays infrastructure that is required to exploit an it is not uncommon for oil and gas clients to (often complex) oil or gas  eld. require accurate measurements of the sea- bed in water depths of over 3,000 m. Should The eet further comprises a series of one attempt to do that with a traditional towed smaller systems that can be easily trans- system then, as the cable does not go ported over the world to conduct smaller straight down when the vessel is moving projects. These smaller AUVs are built to a forward, it would require a cable as long as modular design with components containing 10 km. This would not provide very accurate innovative sensor con gurations, cameras results and it would be time consuming to and intelligent computer systems that for turn the vessel every next measurement. example allow the vehicle to deviate from its prede ned track and automatically locate and Guidance systems follow a pipeline on the seabed that is to be Much better results are obtained when the inspected. measurement device is replaced by an auton- omous system, i.e. a device that can perform measurements independent from the mother ship. Such self propelled Autonomous Under- water Vehicles, known as AUVs, are battery operated and are equipped with a complex computerized guidance system that allows the vehicle to follow a prede ned trajectory. These autonomous systems can move very close to the seabed and with the stability and accuracy of the guidance (positioning) systems they help to provide data qualities that are little short of spectacular. Echo Surveyor These vehicles can weigh up to 1,500 kg and have a heavy duty battery pack that allows for continuous underwater operation for a period of up to three days.

High quality bathymetry data Launching for testing: smaller, modular built AUV system; weight 90 kg from an AUV Exploring for gas hydrates Up to 3,000 m depth

The worldwide presence of natural gas hydrates is assumed to be enormous. And it is considered an interesting alternative to resources from conventional reservoirs.

New energy Gas hydrates potentially contain more fossil energy than is present in oil, gas and coal deposits. Furthermore, it has the same environmental advantage as conventional gas since the burning process causes less

CO2 emission than from oil and coal. This new energy source occurs in a solid compound in which a large amount of methane is trapped within a crystal structure. Gas hydrates can be found in Arctic regions and in ocean sediments. The pace of gas hydrate exploration projects has accelerated over the past few years with the realisation that this unconventional resource could be developed in conjunction with conventional gas elds and using existing technology.

Fugro Synergy Exploring for gas hydrates at great water depth requires special equipment. For this purpose Fugro’s newest vessel, the Fugro Synergy has been especially designed to drill in water depths up to 3,000 m and provide all drilling, logging and coring services that are required

Deployment of Fugro Pressure Corer Lit sample burning gas from gas hydrate

to analyse gas hydrate deposits. Along with marine and drilling crews, the Fugro Synergy accommodates scientists with their testing equipment and laboratories.

Safety and sea oor stability are two important issues to be considered when drilling wells and designing and installing production facilities for the extraction of gas hydrates. The Fugro Synergy will play a role in studying, evaluating and understanding the geologic and engineering properties of gas hydrates.

There are very few vessels that are capable of carrying out this special type of work on a global scale, where areas are explored to assess the presence, amount and character- istics of gas hydrates. Pavement management Surveying the valuable assets of a nation

Test equipment

Video images Video images used to monitor the interstate highway system that provides valuable roadway information for planning, maintaining, and repairing highways. The highway network of a nation usually represents its most valuable asset. An appropriately designed road network is essential for the development of any nation, and ensures not only signifi cant economic benefi ts, but also social and environmental benefi ts for the people and businesses alike. Many well respected studies including research by the World Bank have proven that a well surveyed and maintained road network prevents accidents, saves lives and has a direct economic benefi t.

Pavement specialists Road maintenance planning In order to target scarce maintenance funding Fugro has developed advanced pavement most effectively, regular surveys of highway deterioration prediction techniques to networks are important. Fugro employs pave- optimise road maintenance planning over ment specialists designing pavements for long durations. Lower maintenance costs of new roads and assessing the remaining life of the network can be achieved by arresting existing roads using specialist test equipment deterioration through early intervention, or to determine load carrying capacity. Ground targeting and improving key safety parame- Penetrating Radar (GPR) technique is used to ters whilst ensuring that the network is able acquire data on layer types and thickness of to carry the volumes and weights required the pavement structure. Other geophysical both now and in the future. techniques, such as electromagnetics and radiometrics allow areas of moisture ingress or environmental contamination to be quickly and effectively characterised.

ARAN Multi-function highway condition survey vehicles, known as ARANs (Automatic Road Analyser), are operated at traf c speed to assess the condition of the surface of the road. The assessment includes cracking, Quality control (QC), quality assurance (QA) rutting and ride quality, and is supported by Fugro laboratories perform QC and or QA road geometry and video images. testing of construction and infrastructure These ARANs are designed and assembled by material on sites all over the world. Non- Fugro and are part of its own  eet, but also destructive testing plays an important role in custom-built vehicles are delivered to Govern- QA and is usually based on geophysic tests ment Road Authorities. as described above. ■ General Information

■ C o r p o r at e s o C i a l Geographical expansion is a component of Fugro’s ability RESPONSIBILITY (CSR) to continue to support the increasing prosperity. Growth also means attracting more local staff, and it enables the Vision and ambition organisation to offer opportunities for training and Fugro strives for strong but controlled growth in revenue education to its employees. and net result. The organisation aims for an optimised and balanced synergy between its various activities in The growing demand for energy is partly offset by the use order to realise its goals while maintaining a broad of alternative energy sources such as solar, wind, biofuels, activity portfolio on a geographic and product basis. tidal and nuclear energy. This presents Fugro with Fugro aims to deliver improved added value to its clients opportunities in new markets. by a combination of specialised staff and (often in-house developed) technologies, and associated high-quality services. In addition to growth in revenue and net result, the organisation’s policies on human resources, health, safety and the environment are also of great importance. Sustainability, transparency and reliability are the key themes of Fugro’s central policy.

Fugro realises that the impacts of its specific local activities and the international nature of its services place great demands on its staff. The organisation is aware of its role in society, particularly in an international and multicultural environment, and understands the importance of paying continual attention to corporate When managing its investments, the organisation social responsibility (CSR). Fugro strives to meet the considers the balance between improving the quality of expectations of all the stakeholders in the company by its equipment and the issues of fuel use, emissions and balancing regard for the environment, social awareness cost management. and financial results. Fugro aims to strengthen the coherence of its CSR policy Fugro’s CSR policy develops continuously; its operating by providing a framework to its subsidiaries on how to companies and employees put the principles of CSR into implement the various aspects of CSR. The ISO 26000 daily practice in a wide range of areas. Fugro chooses to guidance standard on corporate social responsibility, include its CSR policy in its annual report: an important which is expected in 2010, will also be considered. consideration being that the subject is inextricably linked with the course of business and should, therefore, be Organisational structure considered to be an integral part of other corporate Fugro is organised into three divisions: Geotechnical, aspects. Survey and Geoscience services. These divisions work together worldwide in focusing on the right solution for Fugro strives towards growth, both organically and the relevant market. The Board of Management is through acquisition. Through this growth, the responsible for Group policy, strategy, acquisitions, organisation can capitalise on the world’s rising investments, risk management, finance and internal prosperity. The presence of local operating companies is coordination. Furthermore, the holding company looks an important spearhead for the integration of Fugro’s after matters that, for reasons of efficiency, advanced services within communities in general. specialisation or financing, are best handled centrally.

56 Fugro’s philosophy is that the operating companies in the Energy divisions should be able to operate autonomously as By increasing the awareness of the use of energy and much as possible within the framework of the group’s sustainable materials, the impact on the environment can policy, business principles and internal risk-management be minimised. Fugro considers this when purchasing or systems. This enhances the quality of the operating ordering new equipment, such as when expanding its companies’ management and the development fleet of vessels (according to DNV ‘Clean Class’ standards) opportunities available for employees. Delegation is and Remotely Operated Vehicles. closely entwined in the corporate culture. The increasing cooperation between or within the different divisions Transfer of knowledge creates synergy, especially for complex and integrated The continuing shortage of well-trained (technical) staff projects, which increases earning capacity. Thus creativity has led to adopt internal training as much as possible, and involvement within the whole organisation are despite the fact that some of the staff trained may move increased while employees’ opportunities for professional to competitor companies. Social prosperity is largely challenges and career development are considerably dependent on the extent to which knowledge and enhanced. innovation processes thrive within an economy. This necessitates investment in training and education. M a n a ge m e n t a p p r o a c h Market presence Fugro’s decentralised organisational structure facilitates a strong market presence, which leads to the use of local suppliers and procedures for the recruitment and training of local staff.

Community Fugro aims to be a good neighbour, as demonstrated by the way the operating companies contribute, directly and indirectly, to the general well-being of the communities in which they work. Managers and employees are Human resource policy encouraged, where appropriate, to become involved with The organisation’s decentralised nature is also reflected in local communities and to support charitable projects, its staff policy. The operating companies are responsible cultural events, and organisations and educational for local staff policies, which take into account local institutions that aim to improve the effectiveness of the customs and regulations, within the guidelines set out by industries in which Fugro operates. the holding company in areas such as salaries, pensions, safety and health (Fugro’s general business principles). Most of the employees in Fugro’s worldwide network of offices are nationals, including the managerial staff.

General Information 57 Participation in industry-related organisations the way it conducts and research institutes business towards clients, In addition to research activities, which form part of its partners and the core business, Fugro is actively involved with several environment has an impact related matters and social initiatives. The company has on the organisation’s a seat on several committees at institutes such as the productivity and success. International Association of Geophysical Contractors The general business (IAGC), the International Marine Contractors Association principles and the business (IMCA), the Hydrographic Society, Australia, and the partner code are available Society for Underwater Technology. on Fugro’s corporate website (www.fugro.com). Fugro also has a board-member position at the Centre for Marine Science and Health and safety policy Technology of the Curtin University of Providing its employees with a safe and healthy working Technology, Australia, at the Royal environment is one of Fugro’s highest priorities. Netherlands Institute for Sea Research The vision for the health (NIOZ) and at the Marine Technology and safety policy is Society, USA. maintained by the holding company. Fugro aims to Worldwide, Fugro supports higher education through create safe and healthy scholarships, financing research and an active working conditions for involvement of Fugro employees on the committees all its employees and or boards of educational establishments. Navigation and subcontractors. Because the seismic data analysis software have been made available organisation attaches such to several universities and research institutes great importance to safety, in the world and Fugro is associated with the Center for this subject is reported on Coastal and Ocean Mapping at the University of New in a separate section. Hampshire, where data and equipment are exchanged to benefit mutual research. Indirect economic contributions As a commercial service provider to the construction and Fugro participates in national and international infrastructure industries, Fugro contributes indirectly to committees for improving and developing guidelines national and international economic developments. for offshore geotechnical research and design (ISO, API, Examples of large-scale infrastructure projects in which ISSMGE, CEN, NEN, SUT and ASCE). Another example of Fugro was involved in 2009 include the company’s many memberships is that of the Maritime • Izmit Bay project (Turkey). In December 2009, Innovation Board in the Netherlands, which aims to geological and geotechnical investigations were develop and optimise the use of natural gas as a source started in preparation for constructing the Izmit of energy. Bridge. This steel suspension bridge across Izmit Bay will be 3 km long and have a 1.7 km span. Its location is Fugro’s general business principles at one of the world’s most seismic active areas. Fugro Fugro works on the principle that every employee shares will also carry out the earthquake sensitivity studies responsibility for the company’s reputation. For all staff, for this project. this means that it is not enough to just do the right thing; things must also be done correctly. Management therefore requires all employees at all levels of the company to observe the general business principles. These requirements determine the way in which Fugro’s staff treat each other, its customers and subcontractors, and anyone else who may be affected by its activities.

Since 2009, Fugro has instituted the Business Partner Code, which requires suppliers and subcontractors to comply with these rules of conduct. Fugro recognises that

58 • Hong Kong-Zhuhai-Macau Bridge (Pearl River Delta, Fugro is also involved in several international projects in China). A bridge almost 30 km long will connect Hong the area of protection against flooding: Kong with Macau and the city of Zhuhai in Guangdong • Poseidon II, marine observations Aegean Sea (Greece). Province, China, by 2016. This bridge will cut the travel This project involves collecting data in Greek time between Hong Kong and Macau from five hours to territorial waters of the Aegean Sea using advanced 30 minutes. As well as geotechnical investigations for measuring buoys. This information is important for the tunnel sections of this crossing, Fugro participated oceanographic research, the safety of shipping in the in detailed preconstruction trials, including an area and protection of the marine ecosystem. It also Osterberg Cell test for load testing some of the piles of offers valuable the main piers. information about potential large-scale environmental disasters and climate change. By attaching a tsunami detection module to the measuring buoys, it is possible to predict tidal waves in the event of an earthquake.

In the Netherlands, Fugro is a partner in the Flood In 2009, Fugro carried out projects relating to quality and Control 2015 programme. The innovative solutions of this quantity of water, including programme will ensure that the right information • Amvrakikos Wetlands (Greece). This project monitored reaches the right place in time to facilitate more effective the water quality in the Amvrakikos Gulf, identified and efficient decision making when there is a risk of possible pollution sources, optimised fertilisation of flooding. It is vital to have advance warning of a potential the surrounding land and improved aquaculture in incident and to be aware of the risks of flooding. In 2009, the lagoons and the bay. Fugro has formulated a Fugro decided to actively participate in the IJkdijk project master plan and models for this type of work, and used in which innovative measurement and monitoring advanced measuring stations in the rivers and off the techniques are being developed, tested and validated on a coast. full-scale test levee under controlled conditions. The aim • Alberta groundwater inventory (Canada). For several is to develop generally applicable monitoring and years Western Canada is working on an inventory of forecasting systems for levees. existing underground groundwater basins. In 2009, Fugro used a helicopter to perform a large-scale electromagnetic survey for this project. The results of this survey will provide data on the geology and the location of underground water resources, and also help the authorities in Alberta to manage and protect these resources in the future.

Flood Control 2015: Solutions for flood control

Real-time monitoring Accurate forecasting Effective decision making

Flood Control 2015 is an initiative of: ARCADIS, Deltares, Fugro, HKV, IBM, ITC, IJkdijk Foundation, Royal Haskoning and TNO.

Flood Control 2015 brochure 2.in1 1 28-10-2009 15:27:10

General Information 59 Indirect environmental contributions The large-scale presence and potentially lower CO2 Sustainable energy emmissions make gashydrates an interesting alternative Demand for sustainable energy has been the driver for the to traditional energy resources such as coal and oil. Fugro significant expansion of wind farm developments in is closely involved with research on the geological and Western Europe. Also in the years to come it is expected technical aspects of the possible future extraction of this that many more wind farms will be built. Fugro provides new energy source (See Theme: Wide spectrum of a variety of services necessary to determine the best services). location, both on and offshore. Examples include • Gwynt y Môr (Irish Sea, UK). In 2009, Fugro finished Sustainable construction seabed surveys for this 750-MW offshore wind farm. An increasing level of sustainability is becoming an The wind farm’s 250 wind turbines will be capable of essential component of the design and construction powering around 500,000 households (40% of the of the built environment. An example of Fugro’s homes in Wales) and will avoid the release of 2 million involvement in this area is the BP Westlake Campus, tonnes of carbon dioxide every year. Houston, USA. BP is striving for Leadership in • Alpha Ventus (Germany). This wind farm is located in Environmental and Energy Design (LEED) certification the North Sea, 45 km north of Borkum Island. The for this $300 million construction project. The U.S. Green wind farm has 12 5-MW wind turbines. Fugro carried Building Council supervises LEED accreditation and out the turbine foundation survey for Alpha Ventus. certification. To meet BP’s ambitions, accredited Fugro LEED professionals in Houston, have provided advice In 2009, Aquamarine Power Ltd commissioned Fugro’s and services for different stages of the sustainable services for the installation of a wave power system near construction of the campus. Orkney (Scotland). The system is installed on the seabed to convert wave energy into clean electricity. Sustainable soil management As examples of Fugro’s extensive involvement in sustainable soil management during 2009, two projects deserve special mention: • Zinc ash monitoring (De Kempen, the Netherlands). Actief Bodembeheer Kempen commissioned Fugro to conduct geophysical research to map the occurrence of zinc ash over 850 km of roads in De Kempen during 2009. Zinc ash was used in the past for road surfacing, but it contains high concentrates of heavy metals, which can leach into the subsoil. The zinc ash will be removed during future renovation and reconstruction In the field of geothermal energy, another form of of the province’s infrastructure. sustainable energy, Fugro plays an important role in data • Clay mining and excavation in Möckern and Vehlitz collection, modelling and consultancy. Also in 2009 (Sachsen-Anhalt, Germany). The mining authority several projects were carried out, for instance, at the of the Ministry of the Economy of Sachsen-Anhalt Louvre Museum and the Guggenheim Museum at Abu requested Fugro to investigate two locations during Dhabi; and the Documenta Museum in Kassel, Germany. 2009 with respect to illegal waste disposal. The In the Netherlands, dozens of feasibility studies for the activities included supervising the excavation of construction of underground systems for cold/heat 500,000 tonnes of soil, groundwater research, slope storage were performed. Through Aachen University in stability calculations, risk analysis and management, Germany, Fugro is closely involved in basic research into consultancy and guidance on redeveloping both the application of geothermal heat and shares its locations. knowledge and experience via the Platform Geothermie with other parties active in the field.

60 Social contributions Another project provided a new dimension during the General business principles (GBP) summer of 2009. While participating in the Hudson400, Fugro’s employees support the social values of reliability, the celebration of 400 years of friendship between the integrity, openness, and respect for fellow employees and Netherlands and New York State, Fugro has further the environment. Application of these values in Fugro’s extended transatlantic cooperation during the business conduct creates a sense of trust between the H2OForum, which links Dutch institutions such as organisation and its partners. These common values form Deltares and Technical University Delft with American the foundation of Fugro’s GBP, which applies to all water professionals. This initiative of the Netherlands operating companies and thus to all employees. Water Partnership, of which Fugro is a partner, deals with All employees are expected to report any breach of the the challenges facing delta areas such as New York and GBP or any suspicion thereof to the board of management the Netherlands. Sharing expertise and experience is or senior management and are required to avoid any helping to realise a sustainable and safe waterfront personal activities or financial interests that may conflict development in the Upper New York Bay and the Dutch with their responsibilities towards the company. IJ-Banks.

One aspect of GBP is Fugro’s continuing commitment to sustainable development. This requires the organisation to make a balanced consideration of its short and long- term business interests and the integration of social, economic and environmental considerations during the commercial decision-making process. Because of its global presence and decentralised structure, Fugro sometimes encounters friction between the lack of local regulation and legislation and the high standards the organisation wishes to pursue. Fugro is not actively engaged with regard to the desirability of project development, but Sponsorship provides services to clients, assuming that these are not Fugro seeks to help preserve and promote accessibility to in violation of local or international regulations or valuable cultural heritage and the organisation supports legislation or Fugro’s GBP. a large number of initiatives worldwide, notably in the fields of the arts, culture and sport. As sponsor of the Fugro believes in free and fair competition based on value Stichting Hermitage, Fugro has contributed to the for money and suitability for purpose. It supports free conception of the present museum, with its exhibition of enterprise within the framework of applicable laws, Russian heritage in the Netherlands. In the area of sport, and works closely with those companies that endorse the local football club, Leidschendam, can rely on Fugro’s comparable GBP. support for the training of young players. Fugro is a sponsor of the national park ‘De Hoge Veluwe’ and Fugro’s Project participation contribution to ‘De Zeesleepboot Holland’ helps to keep Integral to Fugro’s value system is its support for social this sailing museum afloat. initiatives. These include the participation of Fugro NPA (FNPA) in Map Action, an initiative that helps relief organisations to record the consequences of humanitarian disasters such as flooding, earthquakes and tsunamis. FNPA runs the website and gives direct aid and administrative support. Another example of support is the work of Fugro William Lettis & Associates (FWLA), which advises relief organisations in areas affected by earthquakes. FWLA has contributed its specific geological expertise following earthquakes in Turkey, Japan, India and Taiwan and has recently been asked, in addition to Fugro NPA, to help in the aftermath of the latest earthquake in Haiti.

© State Museum Hermitage St. Petersburg

General Information 61 In Great Britain and the United States, operating at the development of in-house experts; and at employees companies regularly assist in cleaning up beaches, with who can be deployed flexibly on a project-by-project basis. some extending this to ‘adoption’ of part of the beach. In Norway, talented musicians are given the opportunity The Fugro Academy provides the core of Fugro’s corporate to develop their skills with help from Fugro Geoteam. training and education. It delivers both group and Fugro Brasil has supported the federal police campaign to divisional level training to staff worldwide. A three-tier provide leaflets on youth drug prevention. In Cornwall, model is used; level 1 for junior and technical roles; Great Britain, Fugro Seacore employees contributed to the level 2 for middle management roles; and level 3 for ‘Precious Lives Appeal’, supporting a hospice for local senior management roles. To ensure all employees have children. The Curacao youth can play football and hockey equal opportunities for training, most courses are with equipment and clothing provided by Fugro. In Hong delivered locally to employees who share a variety of Kong, contributions are made to the Lighthouse Club, experience, differing education levels and cultural which is aimed at supporting the poor. diversity. English is the principal training language, but where appropriate, and possible, courses are translated These are just some of the examples of Fugro’s support of into local languages. For example, corporate project social issues. Contributions are made to the local management training is delivered in Spanish, Portuguese community in which the Fugro subsidiary operates. Help and English, and offshore survey training in Brazil and is targeted towards areas such as education, sports, relief Angola is translated and delivered by local Fugro trainers. and shelter for poor children, the environment, medical In 2009, corporate management development training assistance and medical research. One example of active was provided to 107 staff from 24 nationalities working in involvement is the participation of the Fugro Robertson Fugro offices in 19 countries. Project management team in the BG Energy Challenge in North Wales. training was delivered in 10 countries to 255 staff from The team’s creativity and perseverance helped raise offices around the Group. money for two charities. Flexibility through exchangeability of staff is an important aspect of Fugro’s education policy. To facilitate this, the same technical systems are used throughout the Group whenever possible, and why both short- and long- term employee exchange programmes have been developed. To foster the recruitment of new, young talent, Fugro has built-up good contacts with universities. The organisation supports both management and professional development. This is reflected in the operating companies’ training schemes and in initiatives which enable people to gain experience through overseas postings.

Diversity and opportunities The international operating companies and the various fields of specialisation within Fugro offer employees in middle management challenging international career W o r k i n g e n v i r o n m e n t opportunities. These are based on a clear career and Education management development policy with room for job Fugro’s range of high-quality services provides a strong rotation, the development of individual skills and the foundation for further growth, and supports long-term timely discovery of talent within the company. development of higher standards of service. Fugro’s global presence and innovative capabilities are utilised to Fugro prefers to employ local people in order to operate further these goals. A suitable internal careers policy is successfully in that region. This contributes to staff important in order to retain and benefit from competent diversity and is a balanced reflection of the countries in employees and those with specific expertise relevant to which Fugro operates. the organisation. The education policy is aimed; at employees who demonstrate management potential;

62 Employment benefits The HSE figures for 2009 show that Fugro’s safety policy is Fugro promotes commitment and rewards effort and beginning to pay off. The incidence rate (per 1 million results; for this reason flexible reward systems and an man-hours worked) over the past five years, has been option plan have been in place for many years. Staff and reduced by two thirds. The number of car-accidents (per management are encouraged to participate in the 1 million man-hours worked) has been reduced by 60%. company’s share capital (see also page 12 and pages 107 to 109 of the annual accounts). A proactive approach to the creation of a safe working environment for all staff is a priority for Fugro. The Employee pension schemes and other such benefits are management of the operating companies are responsible maintained on behalf of the company’s staff, taking into for promoting safety training for all staff; assigning account local customs and regulations. responsibility for all aspects of the HSE policy; identifying potential areas for improvement; and carrying out comprehensive evaluations of all incidents and near ■ HEALTH SAFETY AND ENVIRONMENT misses. This system ties in with the company’s business (HSE) principles, which state that the operating companies will carry out their activities independently in accordance Fugro’s responsibilities towards HSE issues are integral to with instructions and supervision from the holding the way it conducts business. The organisation strives for company. a safe and healthy workplace for everyone at each of its establishments. Its commitment is based on the belief that accidents can be prevented. To achieve this goal of prevention, the company identifies the safety risks resulting from its activities and minimises them as far as is reasonably possible. By observing and encouraging this policy, the company contributes to protecting the environment and the general wellbeing of all interested parties, including staff, customers, Through a system of benchmark auditing, the suppliers, subcontractors performances of the different subsidiaries are compared and local communities. with each other and recommendations are made to improve safety conditions. This internal auditing system Safety and well-being will be fully based on OHSAS 18001 in 2010. The HSE Fugro applies a safety management system that outlines a management system of all major operating companies framework for safety at all levels within the organisation. was already compliant with this standard (or equivalent) The management system is designed to promote in 2008. With these measures Fugro is working towards a consistent reporting, to keep HSE-related risks under leadership position in safety in many fields. control, and to identify the ways in which the company can continue to improve safety in the workplace. In recent Environment years, several standards have been developed and Fugro’s services are aimed at efficiently deploying implemented to support this process. In addition, further personnel and equipment for the collection and standardization of an HSE information system was interpretation of data. The organisation also acts as an developed in 2009. The software for this system will be advisory body. Fugro does not own or operate large-scale rolled out at subsidiaries during 2010. This information production facilities that might have an impact on the system will further improve the safety policy and the environment. Its main focus is on environmental aspects recording of accidents and near-misses and will be useful associated with the deployment of the equipment and when analysing, monitoring and responding to these offices from which Fugro operates. safety incidents.

General Information 63 An internal CSR-study carried out in 2009 among the ■ INFORMATION AND COMMUNICATION larger/operational subsidiaries concluded that: TECHNOLOGY (ICT) • 90% of the vehicles the companies bought in 2009 comply to the latest guidelines concerning particle Fugro maintains a global ICT infrastructure which fits the filters and national emission standards needs of a decentralised organisation. Although Fugro • 70% of the subsidiaries had evaluated and where operating companies are generally responsible for possible reduced the energy consumption of buildings managing their own ICT systems, in countries or locations and offices where several Fugro offices are located, these operating • 45% of the subsidiaries had evaluated and where companies often share an ICT support department. possible reduced the energy consumption of their working equipment However, the security of Fugro’s ICT infrastructure is • 90% of the subsidiaries separate waste and reduce or supervised centrally by an independent group of ICT re-use office supplies such as paper, ink cartridges, etc. security personnel, with some aspects outsourced to companies with specialist expertise in this field. Fugro’s Based on the results of the CSR study, Fugro has made it ICT security team comprises a global security officer and its goal that by the end of 2011 all large/operational six regional security officers. This team is responsible for subsidiaries should have a certified environmental maintaining and monitoring the e-security aspects of the management system according to ISO 14001 or equivalent. ICT infrastructure used by the operating companies for access to the internet, e-mail and for extranet and intranet applications. The ICT security team operates As an active member of the IAGC, Fugro follows independently of the ICT support staff within the environmental guidelines that aim to restrict the operating companies. disturbance of marine life. For instance, Fugro applies passive acoustic monitoring in all its seismic research at sea wherever possible. Furthermore, a detailed ■ RESEARCH and DEVELOPMENT analysis of the possible effects on marine environment is a set part of the risk assessment and risk Fugro’s services provision, and thus its global market identification from the start of each project. Once at position, is, to a great extent, dependent on high-value sea, Fugro takes several measures to limit the effects of equipment, technologies and software. Technological our seismic operations, such as applying special research and innovative developments play a key role in protection around the measuring equipment to this. Measurements are becoming more and more prevent entrapment of turtles. detailed and even the most complex data can be interpreted. Very often developments take place in close cooperation with the client because the client is interested in solving a specific problem. To this end, more and more knowledge is exchanged or combined within the company in order to arrive at solutions or new developments.

64 ■ Risk management

General Opportunities Fugro’s risk management policy is aimed at the long-term • Increased investment by the oil and gas industry, sustainable management of its business activities and the amongst others related to depletion of existing fields limiting or, where meaningful, hedging of the associated • Increasing demand for oil and gas as soon as the world risks. Due to the wide diversity of markets, clients and economy recovers regions and its broad portfolio of activities, quantifying • Optimisation of existing oil and gas fields all the existing risks relevant to the Group as a whole is • More and larger infrastructure projects, including virtually impossible. Risks are, however, quantified coastline protection wherever possible and useful. This applies in particular • Increasing demand for mineral exploration as soon as to the influence of the US dollar and the British pound. the demand for minerals recovers See page 26. • Upcoming markets such as India, China, Brazil, Russia and Eastern European countries Strengths • Increasing demand for non-fossil energy sources • Consistent execution of strategy as an independent service provider Threats • A good market position in many niche markets • Prolonged global economic and financial crisis worldwide • Collapse of the demand for oil, gas and/or minerals • Professional employees who receive continuous • Political instability in countries and/or regions additional training important to Fugro • High-quality technology and services provision • Payment risk of clients with low financal strength • Well functioning financial systems and risk • Pressure on prices by clients management systems • Exchange rate fluctuations (USD, GBP) • Cooperation between business units • Strong decrease of the oil price compared to the • Healthy financial position present level (about USD 75 per barrel)

Weaknesses Operational • Sensitivity to rapid, sharp fluctuations in the US dollar Activity portfolio and the British pound exchange rate Although the core activities show a high degree of • Much of the revenue depends on investment by the oil cohesion, they also target highly diverse markets, clients and gas industry and regions. A high proportion of the activities is related to the oil and gas market. Fugro’s dependence on the

Fugro’s long-term risks are limited due to:

• The diversity of activities in more than one • A balanced and flexible vessel fleet composition international market segment; (Fugro owned and chartered); • No clients with contracts accounting for more • Current liabilities (EUR 640 million) amount to than around 4% of Fugro’s total annual revenue; 27% of the balance sheet total; • Use of proprietary, modern technologies (mostly • Limited risk related to pension obligations; developed in-house) and professional • Good internal risk management and control employees; systems; • The ability to adjust quickly to exchange rate • Part of the (manpower) capacity being hired-in and price changes as most contracts are of short on a flexible basis, among which free lance staff; duration; • Strong financial position to support future • Geographical spread of the activities; growth.

Risk management 65 more cyclic investment in oil and gas exploration and Capacity management development is balanced by its involvement in the more Fugro is constantly alert for signals that indicate changes stable investments in oil and gas production. The other in market conditions so it can react quickly and activities are dependent on developments in markets that appropriately. Sudden and unexpected changes in market include infrastructure, construction and mining. conditions are, however, always possible. Some of Fugro’s The influence of positive and negative economic effects is survey activities can precede investment by clients and further moderated by: generally take place at the start of project or investment- • The cohesion between a broad range of services; cycles of clients. This means Fugro’s activities can be the • The good geographical spread; first to be affected by changes in market conditions. • Being an independent service provider to a diverse Postponement and interruption to the flow of orders can base of clients; lead to temporary losses due to under-utilisation of • Strong market positions; and capacity. • The size of the Group. The weather and the availability of vessels are key factors Contract flow and price changes for offshore activities in particular. Weather influences Some of Fugro’s contracts are awarded on the basis of are calculated into the budgets and tend to average out long-term preferred supplier agreements. In the course of over the year and the regions in which Fugro is active. a year Fugro often carries out several projects for the same As far as vessels are concerned, Fugro’s objective is a client. The projects carried out for any single client do balanced fleet in which around 45% of the vessels are not, however, account for more than around 4% of the Company owned and around 40% are on mid-term or long- total annual revenue. Having a large number of clients term charter basis. Some vessels (approximately 15% of supports Fugro’s independence and improves its stability. the fleet) are chartered on a project basis. The fact that Fugro is deploying heavy and specialist equipment does To carry out its projects Fugro has at its disposal highly mean that the risk of capacity under-utilisation will trained employees and technically advanced, and increase. At the same time, the exchange of manpower therefore expensive, equipment. Much of Fugro’s work and equipment between the various business units can involves short-term contracts. Fugro is, to a degree, improve capacity utilisation. The deployment of expensive sensitive to price changes and sudden changes in (marine) equipment also leads to risks with regard to loss exchange rates, although it can adapt quickly. of revenue due to equipment break downs.

Fugro’s budgets are, to a great extent, based on the Part of the staff is appointed on a temporary basis or expected investments by the oil and gas companies. works on a freelance basis, providing Fugro a certain Unless there is a structural drop in the oil price to less flexibility to respond to variations in manpower needs. than USD 35 – 40 per barrel, it is not anticipated that substantial (up or down) fluctuations in oil prices will lead Financial to a rapid change in these investments. Balance sheet Fugro follows an active policy to optimise its balance sheet ratios and thus limit financial risks and maintain the Company’s long-term solvency. Being quoted on the

Breakdown revenue per Breakdown revenue per currency (for the year 2009) sector (for the year 2009)

USD related Oil and gas 29% 6% 3% 4% USD Infrastructure GBP Mining

EUR and other Other

13% 52% 18% 75%

66 stock exchange provides a worthwhile contribution foreign currencies. Rapid and radical changes in exchange towards achieving the Company’s (financial) targets and rates can also influence the balance sheet and profit and enables Fugro to make a well considered selection of the loss account, partly due to the length of time between optimum financing mix when considering larger tenders being submitted and orders being awarded or investments and acquisitions. delayed, during which period forward exchange contracts Future interest rate risks are limited to bank loans. would not be appropriate. This creates an additional Fugro’s objective is to limit the effect of interest rate foreign currency risk that cannot be quantified in changes on the results. advance. At the Group’s current structure and size, a rate difference of USD 0.01 would affect profit by Research costs are charged directly to the results. approximately EUR 1.3 million and revenue by A portion of these costs is accounted for as project-related approximately EUR 12 million. A rate difference of GBP revenue costs. Fugro has evaluated the book value of its 0.01 would affect profit by less than EUR 0.5 million and assets, including goodwill, within the framework of its revenue by approximately EUR 3 million. normal balance sheet evaluation. This has shown that no impairment of any tangible or intangible asset is Pension provisions necessary. Fugro maintains pension schemes for its employees in accordance with regulations and customs which prevail Currency exchange rate conversion in each of the countries in which the Company operates. Fugro limits its susceptibility to changes in foreign currency exchange rates, but is not immune to exchange Since 1 January 2005, Fugro has operated an average rate variances caused by rapid changes to the rates versus salary based pension scheme in the Netherlands. This is the Euro (which is the reporting currency). Besides that, classified as a ‘defined benefit’ scheme. The pension changes in exchange rates will result in translation commitments in the Netherlands are fully re-insured on differences. As most of Fugro’s revenue in local currencies the basis of a guarantee contract. The accrued benefits are is used for local payments, the effect of negative or fully financed. positive currency movements on operational activities at a local level is minimal. In the United States Fugro has a 401K system for its Fugro’s international monetary streams are limited and employees. Fugro contributes towards the deposits of its mainly in US dollars, US dollar related currencies, Euro employees in accordance with agreed rules and taking the and the British pound. regulations of the IRS, the American tax authority, into account. This system is free of risk for Fugro. Where possible and desirable, forward exchange contracts are signed (at a local level and with the approval of Fugro In the United Kingdom Fugro operates a number of N.V.). Fugro strives to match assets and liabilities in pension schemes. All the schemes available to new

Exchange rates (in EUR) USD GBP end of USD end of GBP period average period average

31 December 2009 0.69 0.72 1.13 1.13 30 June 2009 0.71 0.75 1.17 1.12

31 December 2008 0.71 0.68 1.05 1.25 30 June 2008 0.63 0.65 1.26 1.28

31 December 2007 0.68 0.73 1.36 1.46 30 June 2007 0.74 0.75 1.49 1.48

31 December 2006 0.76 0.79 1.49 1.47 30 June 2006 0.79 0.81 1.44 1.45

Risk management 67 Electro magnetic survey with a Dash 7 near Sturgeon Falls, Ontario, Canada.

employees are defined contribution schemes. There is one Corporate handbook defined benefit scheme open for long-serving employees Fugro’s corporate handbook contains mandatory and there are other defined benefit schemes which have instructions regarding many business aspects, including been closed but which have on-going obligations to their risk management. This handbook is for the senior members. Measures have been taken to ensure these management members responsible for further obligations can be paid when required. application within the operating companies. The latest update was issued in November 2009. In the other countries where Fugro has organised retirement provisions for its employees, obligations Financial handbook arising from these provisions are covered by items This handbook contains detailed guidelines for the recognised in the balance sheet of the relevant operating financial reporting. The Financial handbook is for the company. senior management and the controllers of all operating companies. The latest update was issued in December Insurance and legal risks 2009. Fugro is insured against a number of risks. Risks related to professional indemnity and general liability are covered Insurance manual at a Group level. Equipment is insured locally and local The Insurance manual contains detailed guidelines with cover is arranged for risks associated with normal respect to risks to be insured. The Insurance manual is business operations, such as insurance for the vehicle distributed to managers of operating companies and their fleet, the buildings and for employees. employees who are responsible for insurances at the subsidiaries. The latest update was issued in September Some operating companies are involved in claims, either 2009. as the claimant or the defendant, within the context of normal business operations. Where necessary proper Project Management handbook provisions have been accounted for in the annual This handbook provides procedures in preparation to and accounts. Based on developments thus far, it is not for the execution of projects. This handbook is used by anticipated that Fugro’s financial position will be project managers. The latest update was issued in October noticeably affected by any of these proceedings. 2007. With regard to items included in the annual report adjustments to estimates are possible. Planning The business plans of every Fugro unit are translated into Internal systems budgets. Adherence to the budgets is checked on a Due to the generally short-term nature of its assignments, monthly basis. Any unforeseen circumstances that arise, constant monitoring of its markets and its operating and or any substantial deviation from the budgets, must be financial results is intrinsic to Fugro’s modus operandi. reported immediately by the operating company managements to the relevant responsible Executive Clarity and transparency are an absolute must for Committee member and to the Board of Management. assessing and evaluating risks. These are fundamental The monthly reports submitted by the operational characteristics of the Fugro culture. Due to the wide management to Fugro N.V. include an analysis of the variety of markets, clients and regions and Fugro’s achievements versus the approved plans and a forecast for extensive activity portfolio, the management of the the coming period. operating companies is responsible for the application and monitoring of and compliance with the internal control systems. The monitoring systems consist of the internal control framework described below.

68 Authorisation level Advisory roles Managers are bound by clear authorisation restrictions The external auditor does not act in an advisory capacity regarding representation. Projects and contracts with a (except where due diligence projects and activities value or risk that exceeds a specified amount must be relating to the annual accounts are concerned). approved by either regional managers or the appropriate Professional advice is provided by third party experts, member of the Executive Committee or Board of such as tax consultants and insurance advisors. Management. Safety Letter of representation Subsidiaries are externally certified in accordance with Every six months all managers and controllers of OHSAS 18001 or equivalent. Compliance audits are done operating companies and the responsible member of the by internal specialists and by external agencies when Executive Committee sign a detailed statement regarding re-certification has to take place. The last version of the the financial reporting and internal control. safety management system is dated May 2009.

Internal Audit Quality The Holding Company carries out regular and frequent Where required Fugro works in accordance with the internal audits of the various operating companies. relevant certificates such as ISO 9001 or equivalent. The findings are reported directly to the (relevant Compliance audits are carried out internally, by clients members of the) Board of Management and the other and by external agencies. relevant members of the Executive Committee. The findings are also shared with the Audit Committee. Whistle-blower’s regulation Fugro operates a ‘whistle-blower’s charter’ to ensure that Peer reviews any possible infringement of the Group’s policy and ‘Peer reviews’ are also carried out on a regular basis. procedures can be reported without this act of submitting A peer review involves a review of an operating company such a report having any adverse consequences for the by a team from other operating companies. ‘whistle-blower’. The results are reported directly to the (relevant members of the) Board of Management and the other relevant Declaration members of the Executive Committee. The Board of Management is of the opinion that the internal risk management and control systems described Audit Committee in this annual report provide a reasonable assurance that The Audit Committee, which comprises three members the financial reporting does not contain any errors of of the Supervisory Board, ensures an independent material importance and that these systems worked monitoring of the risk management process from the properly in the year under review. perspective of its supervisory role. The Audit Committee focuses on the quality of the internal and external reporting, the effectiveness of the internal audits and the functioning of the external auditor. Further information on the Audit Committee is available on pages 16 and 17 and in the terms of reference of the Audit Committee. These terms of reference are available on Fugro’s website: www.fugro.com.

External audit The annual accounts of Fugro N.V. and its subsidiaries are audited annually by external auditors. These audits take place on the basis of generally accepted auditing standards.

Risk management 69 ■ CORPORATE GOVERNANCE

General In December 2008 the Code Tabaksblat was revised Fugro subscribes from the outset that the Code is based by the Corporate Governance Code Monitoring on the principle accepted in the Netherlands that Committee (‘Frijns Committee’). On 10 December 2009 a company is a long-term alliance between the various the legislator designated the revised Code (hereinafter parties involved in the company. The stakeholders are also referred to as ‘Code Frijns’ or ‘Code’) by decree as the groups and individuals who, directly or indirectly, the new corporate governance code as defined by article influence – or are influenced by – the attainment of the 2:391 Netherlands Civil Code. For Fugro the Code Frijns company’s objects: i.e. employees, shareholders and other became effective retrospectively as per 1 January 2009. lenders, suppliers, customers, the public sector and civil The full text of the Code Frijns is available at society. The Board of Management and the Supervisory www.commissiecorparategovernance.nl. Board have overall responsibility for weighing up these interests, generally with a view to ensuring the continuity In accordance with the recommendations of the Frijns of the enterprise, while the company endeavours to create Committee, Fugro will submit the broad outline of its long-term shareholder value. corporate governance structure and compliance with the revised Code for discussion under a separate agenda item It is very important for Fugro to achieve a balance between to the AGM that will be held on 6 May 2010. Thereafter the interests of its various stakeholders. Good each substantial change in the corporate governance entrepreneurship, integrity, openness and transparent structure of Fugro and in the compliance of the Code shall management as well as good supervision of the be submitted to the AGM for discussion under a separate management are the starting points for Fugro’s corporate agenda item. governance structure. Broad outline Corporate Governance Approval by the Annual General Meeting structure and compliance with the Code The Dutch Corporate Governance Code was initially set up The broad outline of Fugro’s corporate governance by the Tabaksblat Committee (‘Code Tabaksblat’) in structure is explained in this chapter and also on the December 2003. Fugro’s corporate governance structure website: www.fugro.com. All underlying documentation, was approved by the Annual General Meeting (‘AGM’) held including the relevant rules and regulations, the articles on 19 May 2004. In May 2005 the AGM approved the of association of Fugro and of the Trust Office, the Trust amalgamation of the remuneration committee and Office’s terms of administration, its voting policy and nomination committee, which were separate at that annual report are published on the website. time, as well as the chairmanship of the (new) remuneration and nomination committee by the Fugro’s corporate governance structure, its supervision chairman of the Supervisory Board. In the AGM of and the way it is reported are in line with the Code. May 2006 Mr. F.H. Schreve, as a deviation from best The Code contains principles and best practice provisions practice provision III.3.5 (Code Tabaksblat), was that regulate relations between the Board of reappointed as a member of the Supervisory Board for Management, the Supervisory Board and the AGM. a period of four years. Fugro’s corporate governance The principles may be regarded as reflecting the general structure has hardly changed in the meantime, and there views on good corporate governance, which enjoy wide have been no substantial changes in compliance with the support. They have been elaborated in the form of specific Code Tabaksblat that would require approval of the AGM. best practice provisions. Companies may depart from the best practice provisions. Departures may be justified in certain circumstances. Fugro explains annually in its Annual Report to what extent it has applied the principles and best practice provisions during the previous year and, if it did not do so, why and to what extent it did not apply to Fugro.

70 Fugro takes the view that shareholders and certificate Best practice provision III.3.5 (previously Bpp III.3.5 holders, the media, corporate governance ‘rating Tabaksblat Code) agencies’ and proxy advisors should carefully assess the The term of the appointment of Mr. F.H. Schreve deviates reason for each and every departure from the Code’s from this provision because he has already served as a provisions and they should avoid a ‘tick-a-box’ mentality. member of Fugro’s Supervisory Board for longer than A shareholder or certificate holders shall vote as he sees twelve years. He was reappointed as Supervisory Director fit. A shareholder or certificate holder who makes use of by the AGM in May 2006 for a period of four years. the voting advice of a third party is expected to form his His reappointment was deemed to be very important at own judgment on the voting policy of this adviser and the that time for a number of reasons including ensuring voting advice provided by him. the desired continuity in the composition of the Supervisory Board. A full overview (‘Comply or Explain’- report) of Fugro’s compliance with the Code is available on Fugro’s website: Principle III.5 and best practice provision III.5.11 www.fugro.com. This report shows that the (new) Code (previously Principle III.5 and Bpp III.5.11 Tabaksblat had hardly any consequences for Fugro’s corporate Code) governance structure. In May 2005 the Remuneration Committee and the Nomination Committee were, with the approval of the Accountability Code Frijns in 2009 AGM, amalgamated into one committee that carries out Fugro’s corporate governance structure is fully in line the tasks in both areas. The reason for the amalgamation with the recommendations in the Code except for the was that separate Remuneration and Nomination points below. It should be noted that all deviations were Committees (with separate meetings) had proven approved earlier by the AGM. impractical due to the fact that the Supervisory Board is small and three of its members are not resident in the Best practice provision II.1.1 (previously Bpp II.1.1 Netherlands. The chairmanship of this Committee (in Tabaksblat Code) 2009) by the Chairman of the Supervisory Board does not The term of appointment (indefinitely) of Mr. K.S. Wester fully comply with the condition that the chairmanship­ of deviates from this provision. Mr. Wester was appointed to the Remuneration Committee (but there is no separate the Board of Management in 1996 before the Code came remuneration committee) is not filled by the chairman of into force. Fugro cannot rescind rights that have been the supervisory board. See further page 17 with respect to granted and this agreement will be honoured. The four the chairmanship of the Remuneration and Nomination other Board of Management members were each Committee in 2010. appointed for a maximum period of four years. This also applies for new appointments or reappointments. Principle IV.2 (previously Bpp IV.2 Tabaksblat Code) Maintaining its operational independence is crucial for Best practice provision II.2.8 (previously Bpp II.2.7 Fugro (see page 74 for a further explanation). One of the Tabaksblat Code) ways to safeguard this independence is share certification. The employment agreement with Mr. K.S. Wester does not Although the Code provides that the certification provide for a specific severance pay on termination of structure is not meant as a protective measure, Fugro has employment. This agreement was entered into in 1981 chosen, in the interest of its clients, to view the before the Code came into force. Fugro cannot rescind certification structure as part of its protective measures. rights that have been granted and this agreement will be During the performance of its assignments Fugro often honoured. The same applies mutatis mutandis with receives extremely confidential information. Fugro can respect to the employment agreement with Mr. P. van Riel, only perform its assignments if it can secure the albeit that the severance pay is limited to two times the confidential nature of such information towards its annual salary. The appointment of Mr. Van Riel ends on clients. 6 May 2010. If he is reappointed to the Board of Management, the Code will be applied regarding the above.

Corporate Governance 71 The second reason for the certification structure is the come to a well considered decision on the exercise of the prevention of possible harmful effects as a result of voting rights. In addition, when considering the exercise absenteeism in the shareholders meetings of the of voting rights the Board of the Trust Office in any case Company. Fugro considers it not to be in the interest of its takes into consideration the (Dutch) law as well as the stakeholders in general that through absenteeism an articles of association and the terms of administration of accidental majority can, based only on its own interest, the Trust Office. The Board can (also) opt, for reasons of its force through its opinion (this ties in with this Principle own, to not exercise the voting rights on the shares held IV.2). by the Trust Office.

Best practice provision IV.2.1 (previously Bpp IV.2.1 Best practice provision IV.2.8 (previously Bpp IV.2.8 Tabaksblat Code) Tabaksblat Code) In accordance with this provision the Board of the Trust Based on the provisions of article 2:118a Netherlands Civil Office enjoys the confidence of the certificate holders and Code and article 18.2 of the terms of administration of the operates independently of Fugro. One deviation from this Trust Office, the Trust Office will provide a power of provision is that the terms of administration of the Trust attorney to any holder of certificates of shares who so Office do not stipulate the instances in which and the requests, to exercise the voting rights on the shares conditions under which certificate holders may ask the corresponding to the certificates held by the holder in a Trust Office to convene a meeting, except with respect of shareholders meeting of Fugro. Holders of certificates can the right to nominate a candidate for appointment to the (also) choose to have themselves represented in the Board of the Trust Office (see the explanation on best shareholders meeting by a written attorney. In specific practice provision IV.2.2). situations the Trust Office can opt not to provide a requested power of attorney, limit the power of attorney Best practice provision IV.2.2 (previously Bpp IV.2.2 or withdraw a power of attorney. This applies for example Tabaksblat Code) in case a public offer for the (certificates of) shares in the According to this provision the meeting of certificate share capital of Fugro is announced or is already made, holders may make recommendations to the Board of the but it applies also in (other) circumstances in which Trust Office for the appointment of a member to the granting a power of attorney in the view of the Trust Board. The Board of the Trust Office has decided that Office substantially conflicts with the interest of certificate holders representing at least 15% of the issued Fugro and its enterprise (article 18.3 of the terms of share capital in the form of certificates may request that a administration and article 2:118a Netherlands Civil Code). meeting of certificate holders is convened in order to Therefore the deviation of this provision of the Code is make recommendations for the appointment of a that proxies to vote are not issued without any limitation member to the Board of the Trust Office. and in all circumstances. This deviation is of course the consequence of the fact that the structure of share Best practice provision IV.2.5 (previously Bpp IV.2.5 certification is also meant as a protective measure. Tabaksblat Code) According to this provision the Trust Office, in exercising its voting rights, should be guided ‘primarily by the ■ CORPORATE INFORMATION interests of the certificate holders, taking the interests of the company and its affiliated enterprise into account’. Capital structure The articles of association and the terms of The authorised capital of Fugro N.V. is EUR 16,000,000 and administration of the Trust Office provide that if the Trust is divided into: Office exercises the voting rights, the Trust Office will do (i) 96,000,000 ordinary shares, with a nominal value this in such manner that the interest of Fugro and its of EUR 0.05 each; enterprise, as well as the interests of all stakeholders, (ii) 160,000,000 cumulative protective (or protective) will be safeguarded as best as possible (article 2 of preference shares, with a nominal value of the articles of association and article 4 of the terms of EUR 0.05 each; administration). The interests of some stakeholders need (iii) 32,000,000 cumulative financing preference shares, not necessarily at all times run parallel with that of other with a nominal value of EUR 0.05 each, which can stakeholders. For example, some will have a short term be sub-divided into two series of 16,000,000 focus whilst others have a long term focus. It is up to the cumulative financing preference shares; and Board of the Trust Office to, after balancing the interests,

72 (iv) 32,000,000 cumulative convertible financing is required to permit that legal entity to avail itself of preference shares, with a nominal value of EUR the facility of the participation exemption, as 0.05 each, which can be sub-divided into two series currently provided for in article 13 of the Corporation of 16,000,000 cumulative convertible financing Tax Act 1969; preference shares. (c) the transfer of ordinary shares acquired by Fugro N.V. itself or the issue by Fugro N.V. of ordinary shares, if On 31 December 2009 the issued capital amounted to such a transfer or issue takes place within the EUR 3,938,623.90. As of this date, 82.05% of the ordinary framework of either a collaborative arrangement with shares (78,772,478 shares) were issued. No preference or the acquisition of another company, or a legal shares have been issued. merger, or the acquisition of a participating interest or the expansion thereof, in respect of which the Board of Restrictions to the transfer of shares Management, with the approval of the Supervisory The Board of Management’s approval is required for each Board, has by means of an irrevocable resolution transfer of protective preference shares, financing wholly or partially lifted the restrictions limiting the preference shares and convertible financing preference transfer or issue of ordinary shares, to which lifting of shares. The approval has to be requested in writing with restrictions conditions may be attached; the name of the intended recipient of the relevant shares (d) the transfer or transmission of ordinary shares to being indicated. shareholders who on 31 March 1992 were recorded in the shareholders’ register of Fugro N.V. as shareholder, Ordinary shares may be transferred only to natural if in respect of such a transfer or transmission the persons. Notwithstanding the provisions of the previous Board of Management, with the approval of the sentence, the transfer of ordinary shares shall not be Supervisory Board, has by means of an irrevocable possible if and insofar as the acquirer, either alone or resolution wholly or partially lifted the restrictions under a mutual collaboration scheme jointly with one or limiting the transfer of ordinary shares, to which more others, natural persons and/or legal entities, either lifting of restrictions conditions may be attached; directly or – otherwise than as a holder of certificates of (e) the transfer or transmission of ordinary shares to shares issued with the cooperation of Fugro N.V. – group companies of legal entity-shareholders who on indirectly: 31 March 1992 were recorded as shareholders in the (i) is the holder of ordinary shares to a nominal amount shareholders’ register of Fugro N.V., if in respect of such of one percent or more of the total capital of Fugro N.V. a transfer or transmission the Board of Management, issued in the form of ordinary shares (as of 31 with the approval of the Supervisory Board, has by December 2009 one percent equalled 787,725 shares); means of an irrevocable resolution wholly or partially or lifted the restrictions limiting the transfer of ordinary (ii) through such transfer would acquire more than one shares, to which lifting of restrictions conditions may percent of the total capital of Fugro N.V. issued in the be attached. form of ordinary shares. The provision to restrict the transfer of ordinary shares, The restrictions to the transfer of ordinary shares stated protective preference shares, financing preference shares above are not applicable to: and convertible financing preference shares shall not (a) the transfer of ordinary shares to Fugro N.V. itself or to apply and shall continue to be not applicable: a subsidiary of Fugro N.V.; (a) if and as soon as the Board of Management without (b) the transfer or issue of ordinary shares to, or the the prior approval of the General Meeting has resolved exercise of a right to subscribe for ordinary shares by a to issue protective (white-knight) preference shares – trust office or to another legal entity, if in respect of not being an issue pursuant to the exercise of a right to such a trust office or other legal entity the Board of subscribe for protective preference shares as referred Management, with the approval of the Supervisory to in article 6, sub 1 of the articles of association of Board, has by means of an irrevocable resolution Fugro N.V. – if as a result of such an issue and as a wholly or partially lifted the restrictions limiting the result of prior issues of protective preference shares by transfer or issue of ordinary shares, to which lifting of the Board of Management, without said approval or restrictions conditions may be attached; in respect of other cooperation of the General Meeting, so many another legal entity as referred to above, such protective preference shares have been issued that the restrictions may be lifted only to the extent that such total nominal amount of protective preference shares

Corporate Governance 73 issued by the Board of Management without said The main point of Fugro N.V.’s protection against a hostile approval or other cooperation of the General Meeting takeover depends on the one hand on certification of the amounts to more than fifty percent (50%) of the total ordinary shares and, on the other hand, on the possibility nominal amount of the issued shares of other of Fugro N.V. to issue cumulative protective preference categories prior to such an issue or in the case that shares. In addition to this, protective preference shares following an issue of shares pursuant to the exercise of may also be issued by the Fugro subsidiaries Fugro a right to acquire protective preference shares, Consultants International N.V. and Fugro Financial respectively the fulfilment of a condition (attached) to International N.V. to Stichting (Foundation) Continuïteit the conditional placing of protective preference shares Fugro (see page 75). The primary aim of the protective as a result of which issue and/or placement the measures is to safeguard Fugro’s independence in relation aforementioned percentage of fifty percent (50%) is to its clients. exceeded, and, (b) the Board of Management has deposited the resolution Only (non-voting) certificates of shares are listed and to issue and a statement to the effect that the traded on Euronext Amsterdam. These exchangeable provisions of articles 16 and 17 of the articles of certificates are issued by the Trust Office and the Board association of Fugro N.V. shall no longer be applicable, of the Trust Office exercise the voting rights on the at the office of the commercial register. underlying shares in such manner that the interest of Fugro N.V. and its enterprise, as well as the interests of all If article 17 of the articles of association of Fugro N.V. is stakeholders, will be safeguarded as best possible. not applicable, otherwise than on the grounds of article For the composition of the Board of the Trust Office see 18, sub 2 of the articles of association, then article 11, sub page 156. 1 of the terms of administration of the Trust Office is applicable. In accordance with article 11, sub 1, a holder of The (Board of the) Trust Office operates completely certificates of shares who as a result of conversion independent of Fugro N.V. acquires ordinary shares in the capital of Fugro N.V. may only transfer the acquired ordinary shares to a third party Certificate holders (and their authorised proxies): if he or she has first offered these shares to the Trust • may, after timely written notification, attend and Office. If article 11, sub 1 of the terms of administration of speak at shareholders’ meetings; the Trust Office is applicable, the holder of certificates • are entitled to request from the Trust Office a proxy to who as a result of conversion acquires ordinary shares in exercise the voting rights on the shares corresponding the capital of Fugro N.V. during the period that the article to their certificates. The Trust Office may solely limit, in question is applicable will: exclude or revoke this proxy if: (i) not encumber the acquired shares with a right of lien a) a public offer has been announced or made on the or a right of usufruct, whereby the voting right on (certificates of) shares of Fugro N.V. or if a justifiable these shares shall be granted to the holder of the right expectation prevails that such an offer shall be of lien or the usufructuary, and, made, without agreement thereon having (ii) shall not grant a proxy to vote on the acquired shares necessarily been reached with Fugro N.V.; nor accept any voting instructions from third parties b) a holder of certificates or a number of holders of regarding the manner in which he exercises the voting certificates, in accordance with an agreement rights on these shares. between and among them to co-operate, together or not, with subsidiaries, acquire at least twenty Substantial interests in Fugro N.V. five per cent (25%) of the issued capital of Fugro The substantial interests in Fugro N.V. as of 1 March 2010 N.V.; or are reported on page 11. c) in the opinion of the Trust Office, the exercise of voting rights by a holder of certificates constitutes Protective measures (extraordinary control a real conflict of interests with those of Fugro N.V.; rights; limitation of voting rights) • may, provided they are natural persons and they have When carrying out assignments Fugro can have access to not entered into an agreement between and among clients’ extremely confidential information. For this them to co-operate, exchange their certificates for reason Fugro can only carry out its activities if it can ordinary shares entitled to vote up to a maximum of safeguard its independence in relation to its clients. 1% of the issued share capital of Fugro N.V. per shareholder.

74 A possible issue by Fugro N.V. of protective preference The (call) option on protective preference shares granted shares will be to Stichting (Foundation) Beschermings­ by Fugro Consultants International N.V. and Fugro preferente aandelen Fugro. On 7 May 2009 the General Financial International N.V. to Stichting Continuïteit Meeting designated the Board of Management of Fugro Fugro has been approved by the General Meeting in 1999. N.V. as the corporate body which is authorised for a period The objective of Stichting Continuïteit Fugro corresponds of 18 months, therefore until 7 November 2010, subject to to that of Stichting Beschermingspreferente aandelen the approval of the Supervisory Board, to: Fugro. The protective measures described above shall be (a) resolve on the issue of – and/or on the granting of put up, especially in a takeover situation, when this is in rights to subscribe for – all preference shares – the interest of Fugro to protect its independence and also including both the protective preference shares and in defining Fugro’s position in relation to that of the the different kinds of financing preference shares – raider and the raider’s plans and it creates the possibility, and ordinary shares in which the authorised capital is when necessary, to look for alternatives. The protective divided at the date of the relevant resolution. measures will not be put up to protect the Board of (b) restrict and/or to exclude pre-emption rights that Management’s own position. Due to the uncertainty accrue to shareholders upon issue of (grant of rights to regarding the situations with which Fugro could be subscribe for) ordinary shares and/or financing confronted, the use of protective measures in preference shares. circumstances other than those described above cannot The authorisation of the Board of Management with be discounted. respect to the issue of ordinary shares and /or to grant rights to subscribe for ordinary shares has been limited to Option scheme 10% of the issued share capital of Fugro N.V. at the time of Fugro has an option scheme that was approved by the the issue plus an additional 10% of the issued capital of General Meeting on 14 May 2008. Details of the option Fugro N.V. at the time of the issue in connection with or scheme are described on page 12 of this Annual Report. on the occasion of mergers and acquisitions. Options are granted to the members of the Board of Management and other employees in such way that at any Fugro N.V. and Stichting Beschermingspreferente moment the maximum number of outstanding options to aandelen Fugro have not entered into an option acquire ordinary shares in Fugro N.V. will not exceed 7.5% agreement. If the threat of a hostile takeover is such that of the issued ordinary share capital. In order to mitigate an immediate issue by Fugro N.V. of protective preference dilution, it is Fugro’s policy to re-purchase certificates of shares to Stichting Beschermingspreferente aandelen shares to cover the stock option scheme with the result Fugro is desirable, the Board of Management should, on that no new (certificates of) shares are issued when the basis of its designation, subject to the approval of the options are exercised. The total number of employee Supervisory Board, as the corporate body authorised to options to be issued is subject to the approval of the issue shares and/or on the granting of rights to subscribe Supervisory Board, as is the grant of employee options to for shares, resolve on this. members of the Board of Management itself.

The objective of Stichting Beschermingspreferente Agreements with a shareholder that could aandelen Fugro is to represent the interests of Fugro and provide a reason for limitation of the its enterprise, as well as the entities within the Fugro transfer of (certificates of) shares Group, in such a way that the interests of Fugro as well as If article 11, sub 1 of the terms of administration of the the interests of all stakeholders, will be safeguarded as Trust Office is applicable (see also above), exchange of best as possible. Any influences which could damage the certificates into ordinary shares is only possible if the independence and/or continuity and/or identity of Fugro holder of certificates who or which acquires ordinary and its associated companies to the detriment of those shares in the capital of Fugro N.V. as a result of the interests are to be prevented as far as possible, as is the exchange, shall accept the stipulations pursuant to execution of anything that is related to or could be article 11, sub 1. beneficial to the above.

The (Board of) Stichting Beschermingspreferente aandelen Fugro operates completely independent of Fugro N.V.

Corporate Governance 75 Functioning of the General Meeting binding nature of the nomination, a new meeting may be The powers of the (Annual) General Meeting are stipulated convened at which the resolution may be passed by an in legislation and in the articles of association of Fugro absolute majority of votes, regardless of the proportion of and can be stated concisely as follows: approval of the capital represented at this General Meeting. decisions that would cause a major change to the identity or character of Fugro or its business; appointment and Unless the resolution is proposed by the Supervisory dismissal of members of the Board of Management and of Board, the General Meeting may only pass a resolution to the Supervisory Board; adoption of the remuneration suspend or dismiss a member of the Board of policy for the members of the Board of Management, Management or Supervisory Board with a majority of approval of the stock option scheme and determination two-thirds of the votes cast, which majority represents of the remuneration of members of the Supervisory more than one half of the issued capital. With regard to Board; adoption of the annual accounts of Fugro and the overruling of the binding nature of a nomination by discharge of members of the Board of Management and of the Supervisory Board and the decision to suspend or the Supervisory Board; approval of the profit dismiss a member of the Board of Management or appropriation authorisation to acquire own shares, to Supervisory Board, as referred to above, convening a issue shares (or to grant options on shares) and to restrict second General Meeting pursuant to article 2:120, sub 3 or exclude pre-emptive rights in respect of shares; and Netherlands Civil Code is not permitted. approval of decisions to amend the articles of association or to dissolve Fugro. A resolution to amend the articles of association of Fugro N.V. may be passed only on a proposal thereto of the Board In addition, the following is discussed with the (Annual) of Management with the prior approval of the Supervisory General Meeting: the annual report of Fugro; policy on Board and by a majority of at least two-thirds of the votes reserves and dividend; changes to the profile of the cast at a General Meeting at which at least one-half of the Supervisory Board; substantial changes in the corporate issued capital is represented. If at a meeting at which the governance structure of Fugro and in the compliance with proposal to amend the articles of association is to be the Code. considered, the required part of the capital is not represented, then a second meeting may be convened to At least one (Annual) General Meeting is convened each be held at most twenty-eight days after the first meeting, year. Extraordinary shareholders’ meetings are convened at which second meeting the resolution to amend the as often as the Supervisory Board or the Board of articles of association may be passed, irrespective of the Management deems this necessary. The shareholders’ part of the capital represented at such meeting, provided meeting is chaired by the Chairman of the Supervisory such resolution is adopted by a majority of at least two Board. The Supervisory Board and the Board of thirds of the votes cast. Management provide the General Meeting with all the information requested, unless there is a very good reason Insofar as a resolution to amend the articles of association why providing the information would not be in the brings about a change in the rights vested in the holders interests of Fugro. of protective preference shares, or the holders of financing preference shares or the holders of convertible Appointment and dismissal of members of financing preference shares, such a resolution shall the Board of Management and Supervisory require the approval of the meeting of holders of Board, amendment of the articles of protective preference shares, or the meeting of holders of association financing preference shares, or the meeting of the holders The members of both the Board of Management and the of convertible financing preference shares, as the case Supervisory Board are appointed by the General Meeting may be. for a maximum period of four years on a binding nomination of the Supervisory Board. The binding nature of such a nomination may, however, be overruled by a resolution adopted by an absolute majority of the votes cast by the General Meeting. This majority must represent more than one third of the issued capital. If the portion of the capital referred to in the previous sentence is not represented at the meeting, but an absolute majority of the votes cast is in favour of a resolution to overrule the

76 Authorisation of the Board of Management a) Credit facility with Royal Bank of Scotland Plc of with regard to the acquisition of own EUR 100 million for three years. This agreement was shares and the issue of shares implemented in 2009 and the facility has been fully Fugro N.V. regularly proposes to its shareholders to utilised. The facility may be cancelled in the event of a authorise the Board of Management to acquire and to ‘change of ownership’ of Fugro N.V. whereupon all or issue (certificates of) shares. part of the loans may become immediately due and payable. On 7 May 2009 the General Meeting authorised the Board of Management for a period of 18 months as from 7 May Credit facility with Rabobank of EUR 100 million for 2009 until 7 November 2010, subject to the approval of the five years. This agreement was implemented in 2008 Supervisory Board, to cause Fugro to purchase its own and the facility has been fully utilised. The facility may (certificates of) shares, within the limits set by the articles be cancelled in the event of a ‘change of ownership’ of of association (10% of the issued capital), either through Fugro N.V. whereupon all or part of the loans may purchase on a stock exchange or otherwise, at a price, become immediately due and payable. excluding expenses, not lower than the nominal value of the shares and not higher than 10% above the average of Credit facility with Rabobank of EUR 100 million for the closing price of the certificates of the shares on three years. This agreement was implemented in 2009 Euronext Amsterdam for the five business days before the and the facility has been fully utilised. The facility may day on which the purchase is made. be cancelled in the event of a ‘change of ownership’ of Fugro N.V. whereupon all or part of the loans may The Board of Management was also designated as the become immediately due and payable. corporate body which is authorised, subject to the approval of the Supervisory Board, to resolve on the issue Credit facility with ING Bank N.V. of EUR 100 million of – and/or on the granting of rights to subscribe for – all for three years. This agreement was implemented in preference shares – including both the protective 2009. An amount of EUR 75 million of the facility has preference (white-knight) shares and the different kinds been utilised. The facility may be cancelled in the of financing preference shares – and ordinary shares in event of a ‘change of ownership’ of Fugro N.V. which the authorised capital is divided at the date of the whereupon all or part of the loans may become relevant resolution. The Board of Management was also immediately due and payable. designated as the corporate body which is authorised, subject to the approval of the Supervisory Board, to Credit facility with BNP Paribas S.A. of EUR 50 million restrict and/or to exclude pre-emption rights that accrue for three years. This agreement was implemented in to shareholders upon issue of (grant of rights to subscribe 2009 and the facility has not yet been utilised. for) ordinary shares and/or financing preference shares. The facility may be cancelled in the event of a ‘change of ownership’ of Fugro N.V. The authorisation of the Board of Management with respect to the issue of ordinary shares and /or to grant b) Private Placement USD loans. As described in rights to subscribe for ordinary shares has been limited to paragraph 5.46.2 of the Annual Accounts, Fugro has 10% of the issued share capital of Fugro N.V. at the time of concluded long term loans with American and British the issue plus an additional 10% of the issued capital of institutional investors. The terms and conditions of Fugro N.V. at the time of the issue in connection with or these loans provide that Fugro N.V. may consolidate or on the occasion of mergers and acquisitions. merge with any other person or legal entity if either a) Fugro N.V. shall be the surviving or continuing person, The Board of Management may resolve, with the approval or b) the surviving, continuing or resulting person or of the Supervisory Board, to dispose of (certificates of) legal entity that purchases, acquires or otherwise shares acquired by Fugro N.V. in its own capital. acquires all or substantially all of the assets of the company i) is a solvent entity organised under the laws Consequences of public bid for major of any approved jurisdiction (any of the following a g r e e m e n t s jurisdictions: the Netherlands, The United States, Fugro N.V. differentiates three categories of agreements as Canada and any country which is a member of the EU referred to in article 10 section 1 under j of the Takeover (other than Greece) at the time of the date of the Directive: agreement, ii) is engaged in any similar line of

Corporate Governance 77 business as Fugro and iii) expressly assumes the wound-up, merged or taken over, or undergoes a far- obligations of Fugro under this agreement in a writing reaching restructuring or a fundamental change of policy. which is in form and substance reasonably satisfactory The agreement with Mr. Wester does not provide for a to the holders of at least 51% of the outstanding specific severance pay on termination of employment. principal amount of the notes. This agreement was entered into in 1981 (Mr. Wester was appointed to the Board of Management in 1996) before the c) Employee option agreements. The employee option Code came into force. Fugro N.V. cannot rescind rights agreements stipulate that in the event of a that have been granted and this agreement will be restructuring of the share capital of Fugro N.V. or honoured. a merger of Fugro N.V. with any other legal entity, the option holder is entitled for every option to such Corporate Governance statement securities, cash or other property as to which a This is a statement concerning corporate governance shareholder of Fugro N.V. is entitled per share as referred to in article 2a of the decree on additional immediately prior to the restructuring or merger, requirements for annual reports (Vaststellingsbesluit  unless the option period is shortened by Fugro N.V. nadere voorschriften inhoud jaarverslag) effective as of In the event of a restructuring of its share capital or 1 January 2010 (the ‘Decree’). The information required merger with another company, Fugro N.V. may shorten to be included in this corporate governance statement the option period so as to terminate immediately prior as described in articles 3, 3a and 3b of the Decree can to the time at which the restructuring or merger is be found in the following chapters, sections and pages of effectuated. In the event that a public offer is this Annual Report 2009 and are deemed to be included considered hostile and such offer is declared and repeated in this statement: unconditional, all options become immediately • the information concerning compliance with the exercisable. Dutch Corporate Governance Code, as required by article 3 of the Decree, can be found in the chapter on Payment to members of the Board of ‘Corporate governance’; Management on termination of employment • the information concerning Fugro’s main features of resulting from a public bid the internal risk management and control systems Fugro N.V. has not entered into any agreements with relating to the financial reporting process, as required members of the Board of Management or employees that by article 3a sub a of the Decree, can be found in the provide for a specific severance pay on termination of chapter on ‘Risk management’; employment as a result of a public bid within the • the information regarding the functioning of Fugro’s meaning of article 5:70 or 5:74 of the Financial Markets General Meeting, and the authority and rights of Supervision Act in the Netherlands. Fugro’s shareholders and holders of certificates of The employment agreements with Messrs. Jonkman, shares, as required by article 3a sub b of the Decree, Van Riel, Rüegg and Steenbakker do – in accordance with can be found in the chapter on ‘Corporate governance’; the Code – provide for a general severance pay which in • the information regarding the composition and principle is applicable in the event of termination or functioning of Fugro’s Board of Management, the annulment of the employment agreement. The severance Supervisory Board and its Committees, as required by pay amounts to two year’s salary for Mr. Van Riel during article 3a sub c of the Decree, can be found in the the first four-year period of appointment which ends at relevant sections of the chapter on ‘Corporate the end of the General Meeting on 6 May 2010. The Code Governance’, the Report of the Supervisory Board and will be applied regarding the severance pay (maximum of on pages 14 and 20; one year salary) if Mr. Van Riel is reappointed on 6 May • the information concerning the inclusion of the 2010. The severance pay for Messrs. Jonkman, Rüegg and information required by the decree Article 10 EU Steenbakker amounts to a maximum amount of one Takeover Directive, as required by article 3b of the year’s salary. These severance payments are also Decree, can be found in the chapter on ‘Corporate applicable in the event that said persons in Governance’. reasonableness cannot continue to perform their This corporate governance statement is also available on function any longer as result of a change in circumstances Fugro’s website: www.fugro.com. such that continuing to fulfil their function can no longer be asked of them. This could be the case if Fugro N.V. is

78 FUGRO N.V.

1 Consolidated statement of comprehensive income 80

2 Consolidated statement of financial position 82

3 Consolidated statement of changes in equity 83

4 Consolidated statement of cash flows 85

5 Notes to the consolidated financial statements 87

6 Subsidiaries and investments of Fugro N.V. accounted for using the equity method 145

7 Company balance sheet 148

8 Company income statement 149

9 Notes to the company financial statements 150

10 Other information 155 10.1 Auditor’s report 155 10.2 Subsequent events 156 10.3 Foundation Boards 156 10.4 Profit appropriation 156 10.5 Proposed profit appropriation 157

Report of Stichting Administratiekantoor Fugro (‘Trust Office‘) 158

Historic review 160

Glossary 162

Annual accounts 2009 1 Consolidated statement of comprehensive income For the year ended 31 December

(EUR x 1,000) 2009 2008

(5.25) Revenue 2,052,988 2,154,474 (5.28) Third party costs (624,413) (722,321)

Net revenue own services (revenue less third party costs) 1,428,575 1,432,153 (5.29) Other income 24,440 17,841

(5.30) Personnel expenses (652,807) (619,146) (5.35) Depreciation (173,593) (140,429) (5.36) Amortisation of intangible assets (10,115) (9,017) (5.31) Other expenses (249,078) (295,670)

Results from operating activities (EBIT) 367,422 385,732 Finance income 7,174 30,606 Finance expenses (27,541) (31,987)

(5.32) Net finance costs (20,367) (1,381)

(5.38) Share of profit of equity accounted investees (net of income tax) 422 (102)

Profit before income tax 347,477 384,249 (5.33) Income tax expense (74,412) (94,793)

Profit for the period 273,065 289,456

Attributable to: Owners of the Company 263,410 283,412 Non-controlling interests 9,655 6,044

Profit for the period 273,065 289,456

(5.45) Basic earnings per share (EUR) 3.46 3.88

(5.45) Diluted earnings per share (EUR) 3.42 3.73

80 1 Consolidated statement of comprehensive income (continued) For the year ended 31 December

(EUR x 1,000) 2009 2008

Profit for the period 273,065 289,456

Other comprehensive income (5.32) Foreign currency translation differences of foreign operations 47,517 (52,762) (5.32) Effective portion of change in fair value of hedge of net investment in foreign operations 1,788 (2,682) (5.33) Defined benefit plan actuarial gains (and losses) (10,449) (23,229) (5.32) Effective portion of changes in fair value of cash flow hedges 1,034 1,032 (5.32) Change in fair value of financial assets available for sale 1,879 (2,526)

Total other comprehensive income (net of tax) 41,769 (80,167)

Total comprehensive income 314,834 209,289

Attributable to: Owners of the Company 305,342 203,245 Non-controlling interests 9,492 6,044

Total recognised income and expense for the period 314,834 209,289

Fugro Annual accounts 2009 81 2 Consolidated statement of financial position As at 31 December

(EUR x 1,000) 2009 2008

Assets (5.35) Property, plant and equipment 1,043,227 859,088 (5.36) Intangible assets 492,690 452,130 (5.38) Investments in equity accounted investees 1,359 1,293 (5.39) Other investments 23,541 2,953 (5.40) Deferred tax assets 25,677 26,289

Total non-current assets 1,586,494 1,341,753

(5.41) Inventories 80,634 39,733 (5.42) Trade and other receivables 572,010 619,369 (5.34) Income tax receivables 19,384 9,165 (5.43) Cash and cash equivalents 107,795 113,286

Total current assets 779,823 781,553

Total assets 2,366,317 2,123,306

Equity Share capital 3,939 3,830 Share premium 431,441 431,441 Reserves 488,941 209,646 Unappropriated result 263,410 283,412

Total equity attributable to owners of the Company 1,187,731 928,329

Non-controlling interests 11,779 7,482

(5.44) Total equity 1,199,510 935,811

Liabilities (5.46) Loans and borrowings 441,339 395,384 (5.47) Employee benefits 72,582 52,488 (5.48) Provisions 6,240 13,155 (5.40) Deferred tax liabilities 7,124 975

Total non-current liabilities 527,285 462,002

(5.43) Bank overdraft 167,556 194,580 (5.46) Loans and borrowings 25,826 26,485 (5.49) Trade and other payables 350,043 395,520 Other taxes and social security charges 40,513 31,515 (5.34) Income tax payable 55,584 77,393

Total current liabilities 639,522 725,493

Total liabilities 1,166,807 1,187,495

Total equity and liabilities 2,366,317 2,123,306

82 3 Consolidated statement of changes in equity

(EUR x 1,000) 2009

Non-­ Trans­ Reserve Unappro- control- Share Share lation Hedging Other for own priated ling Total capital premium reserve reserve reserves shares result Total interest equity

Balance at 1 January 2009 3,830 431,441 (165,289) (5,579) 491,175 (110,661) 283,412 928,329 7,482 935,811 Total comprehensive income for the period: Profit or (loss) 263,410 263,410 9,655 273,065

Other comprehensive income (5.32) Foreign currency translation differences of foreign operations 47,680 47,680 (163) 47,517 (5.32) Effective portion of change in fair value of hedge of net investment in foreign operations 1,788 1,788 1,788 (5.33) Defined benefit plan actuarial gains and (losses) (10,449) (10,449) (10,449) (5.32) Net change in fair value of cash flow hedges transferred to profit or loss 1,034 1,034 1,034 (5.32) Change in fair value of financial assets available for sale 1,879 1,879 1,879

Total other comprehensive income (net of tax) – – 49,468 1,034 (8,570) – – 41,932 (163) 41,769

Total comprehensive income for the period – – 49,468 1,034 (8,570) – 263,410 305,342 9,492 314,834

Transactions with owners recorded directly in equity Contributions by and distributions to owners (5.30) Share-based payment transactions 9,094 9,094 9,094 Share options exercised 10,431 10,431 10,431 Addition to reserves 230,208 (230,208) – – (5.44) Own shares acquired and stock dividend 109 (12,370) (12,261) (12,261) (5.44) Dividends to shareholders (53,204) (53,204) (5,195) (58,399)

Total contributions by and distribution to owners 109 – – – 239,302 (1,939) (283,412) (45,940) (5,195) (51,135)

Balance at 31 December 2009 3,939 431,441 (115,821) (4,545) 721,907 (112,600) 263,410 1,187,731 11,779 1,199,510

Fugro Annual accounts 2009 83 3 Consolidated statement of changes in equity (continued)

(EUR x 1,000) 2008

Non-­ Trans­ Reserve Unappro- control- Share Share lation Hedging Other for own priated ling Total capital premium reserve reserve reserves shares result Total interest equity

Balance at 1 January 2008 3,521 301,550 (109,845) (6,611) 338,562 (43,401) 216,213 699,989 7,033 707,022 Total comprehensive income for the period: Profit or (loss) 283,412 283,412 6,044 289,456

Other comprehensive income (5.32) Foreign currency translation differences of foreign operations (52,762) (52,762) (52,762) (5.32) Effective portion of change in fair value of hedge of net investment in foreign operations (2,682) (2,682) (2,682) (5.33) Defined benefit plan actuarial gains and (losses) (23,229) (23,229) (23,229) (5.32) Net change in fair value of cash flow hedges transferred to profit or loss 1,032 1,032 1,032 (5.32) Change in fair value of financial assets available for sale (2,526) (2,526) (2,526)

Total other comprehensive income (net of tax) – – (55,444) 1,032 (25,755) – – (80,167) – (80,167)

Total comprehensive income for the period – – (55,444) 1,032 (25,755) – 283,412 203,245 6,044 209,289

Transactions with owners recorded directly in equity Contributions by and distributions to owners (5.30) Share-based payment transactions 6,656 6,656 6,656 Share options exercised 8,508 8,508 8,508 Addition to reserves 180,422 (180,422) – – (5.44) Own shares acquired and stock dividend 51 (75,768) (75,717) (75,717) Acquisition of majority share (1,829) (1,829) (5.44) Conversion of convertible loan 258 129,891 (8,710) 121,439 121,439 (5.44) Dividends to shareholders (35,791) (35,791) (3,766) (39,557)

Total contributions by and distribution to owners 309 129,891 – – 178,368 (67,260) (216,213) 25,095 (5,595) 19,500

Balance at 31 December 2008 3,830 431,441 (165,289) (5,579) 491,175 (110,661) 283,412 928,329 7,482 935,811

84 4 Consolidated statement of cash flows For the year ended 31 December

(EUR x 1,000) 2009 2008

Cash flows from operating activities Profit for the period 273,065 289,456 Adjustments for: (5.35) Depreciation 173,593 140,429 (5.36) Amortisation of intangible assets 10,115 9,017 Amortisation of transaction costs related to loans and borrowings 322 58 (5.32) Net finance costs (excluding net foreign exchange variance) 5,370 27,156 (5.38) Share of profit of equity-accounted investees (422) 102 Gain on sale of property, plant and equipment (2,932) (1,978) (5.30) Equity settled share-based payment transactions 9,094 6,656 (5.33) Income tax expense 74,412 94,793

Operating cash flows before changes in working capital and provisions 542,617 565,689 Change in inventories (37,990) 3,006 Change in trade and other receivables 26,867 (93,637) Change in trade and other payables (7,156) 73,083 Change in provisions and employee benefits 3,867 984

528,205 549,125 Interest paid (13,883) (31,206) Income tax paid (92,328) (88,570)

Net cash from operating activities 421,994 429,349

Cash flows from investing activities Proceeds from sale of property, plant and equipment 14,951 6,025 Proceeds from sale of other investments 98 647 (5.32) Interest received 4,862 4,646 (5.32) Dividends received 2,312 185 (5.26) Acquisition of subsidiaries, net of cash acquired (31,923) (85,505) (5.35) Acquisition of property, plant and equipment (320,362) (323,046) (5.35) Expenditure for assets under construction (29,340) (56,944) (5.36) Acquisition of intangible assets (694) (881) (5.36) Internal developed intangible assets (5,893) (7,089) Investment in equity accounted investees – (267) (5.39) Acquisition of other investments (18,851) (122)

Net cash from investing activities (384,840) (462,351)

Fugro Annual accounts 2009 85 4 Consolidated statement of cash flows (continued) For the year ended 31 December

(EUR x 1,000) 2009 2008

Cash flows from financing activities Issue of long-term loans 75,094 100,000 Repurchase of own shares (12,261) (75,717) Paid consideration for the exercise of share options (11,352) (7,262) Proceeds from the sale of own shares 21,783 15,769 Repayment of borrowings (27,141) (34,676) Payment of transaction costs related to loans and borrowings (1,375) – Dividend paid (58,399) (39,557)

Net cash from financing activities (13,651) (41,443)

Net increase/(decrease) in cash and cash equivalents 23,503 (74,445) Cash and cash equivalents at 1 January (81,294) (6,469) Effect of exchange rate fluctuations on cash held (1,970) (380)

Cash and cash equivalents at 31 December (59,761) (81,294)

Presentation in the statement of financial position (5.43) Cash and cash equivalents 107,795 113,286 (5.43) Bank overdraft (167,556) (194,580)

(59,761) (81,294)

86 5 Notes to the consolidated financial statements

5.1 General Fugro N.V. (‘the Company’) is a company domiciled in Leidschendam, the Netherlands. The consolidated financial statements of the Company for the year ended 31 December 2009 comprise the Company and its subsidiaries (together referred to as the ‘Group’) and the Group’s interests in equity accounted investees. A summary of the main subsidiaries is included in chapter 6. The annual accounts have been prepared by the Board of Management and have been authorised for issue by the Supervisory Board on 4 March 2010. Publication will take place on 5 March 2010. The annual accounts will be submitted for adoption to the Annual General Meeting of Shareholders on 6 May 2010. The official annual accounts are prepared in the Dutch language. With reference to the Company income statement of Fugro N.V., use has been made of the exemption pursuant to Section 402 of Book 2 of the Netherlands Civil Code.

5.2 Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil Code.

5.3 Significant accounting policies 5.3.1 Basis of preparation The financial statements are presented in EUR x 1,000, unless mentioned otherwise. The Euro is the functional and presentation currency of the Company. The financial statements have been prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments, financial instruments at fair value through profit or loss, available-for-sale financial assets and plan assets associated with defined benefit plans. The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ materially from these estimates. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making the judgements about the carrying values of the assets and liabilities that are not readily apparent from other sources. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Key sources of estimation uncertainty and references to the notes which include information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in note 5.60. The accounting policies have been consistently applied by all subsidiaries and associates to all periods presented in these consolidated financial statements, except as explained in note 5.3.1.2, which addresses changes in accounting policies. Some comparative information is restated for comparison purposes.

5.3.1.2 Changes in accounting policies Overview Starting 1 January 2009, the Group has changed its accounting policies in the following areas: • Accounting for borrowing costs • Determination and presentation of operating segments • Presentation of financial statements • Presentation of interest costs and expected returns on plan assets related to defined benefit obligations.

Accounting for borrowing costs In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 January 2009, the Group capitalises borrowing costs attributable to the acquisition, construction or

Fugro Annual accounts 2009 87 production of a qualifying asset as part of the cost of that asset. Previously the Group immediately recognised all borrowing costs as an expense. This change in accounting policy was due to the adoption of IAS 23 - Borrowing Costs (2007). In accordance with the transitional provisions of this standard; comparative figures have not been restated. The change in accounting policy had no material impact on earnings per share. The Group has capitalised borrowing costs with respect to fixed assets under construction (see note 5.35).

Determination and presentation of operating segments As of 1 January 2009 the Group determines and presents operating segments based on the information that internally is provided to the Executive Committee, which is the Group’s Chief Operating Decision Maker. This change in accounting policy is due to the adoption of IFRS 8, Operating Segments. Previously operating segments were determined and presented in accordance with IAS 14, Segment Reporting. The new accounting policy did not change the segments that qualify as reportable segments under IFRS 8. Since the change in accounting policy only impacts presentation and disclosure aspects, there is no impact on earnings per share. An operating segment is a component of the Group that engages in business activities from which the Group may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the Executive Committee to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Segment results that are reported to the Executive Committee include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly deferred tax, loans and borrowings and corporate assets and expenses. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill.

Presentation of financial statements The Group applies revised IAS 1, Presentation of Financial Statements (2007), which became effective as of 1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-equity holder changes in equity are presented in the consolidated statement of comprehensive income. This presentation has been applied in these financial statements as of and for the year ended on 31 December 2009. Comparative information has been re-presented in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

Presentation of interest costs and expected returns on plan assets related to defined benefit obligations The Group revised it’s accounting policy with respect to the presentation of interest costs and expected returns on plan assets related to defined benefit obligations. Since the general practice is to present interest costs and expected returns on plan assets under personnel expenses, this principle is now applied. Comparative information has been re-presented so that it also is in conformity with the revised accounting policy. The accounting policy change does not have any material impact on the presentation of current and prior years’ results. Since the change in accounting policy only impacts presentation aspects there is no impact on earnings per share.

5.3.2 New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2009, and have not been applied in preparing these consolidated financial statements:

– Revised IFRS 3 Business Combinations (2008) incorporates the following changes that are likely to be relevant to the Group’s operations: – A contingent consideration will be measured at fair value, with subsequent changes therein recognised in profit or loss.

88 – Transaction costs, other than share and debt issue costs, will be expensed as incurred. – Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised in profit or loss. – Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis. Revised IFRS 3, which becomes mandatory for the Group’s 2010 consolidated financial statements, will be applied prospectively and therefore there will be no impact on prior periods in the Group’s 2010 consolidated financial statements.

– Amended IAS 27 Consolidated and Separate Financial Statements (2008) requires accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The amendments to IAS 27, which become mandatory for the Group’s 2010 consolidated financial statements, are not expected to have a significant impact on the consolidated financial statements.

Other than the new standards listed above, a number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2009, and have not been applied in preparing these consolidated financial statements. None of these at the moment identified changes will have an effect on the consolidated financial statements of the Group.

5.4 Basis of consolidation 5.4.1 Subsidiaries Subsidiaries are those entities controlled by the Group, taking into account the impact of potential voting rights that are presently exercisable. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

5.4.2 Equity accounted investees Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

5.4.3 Other investments Other investments are those entities in whose activities the Group holds a non-controlling interest and has no control or significant influence.

5.4.4 Transactions eliminated on consolidation Intra-group balances, transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated to the extent of the Group’s interest in the investee. Unrealised gains arising from transactions with associates are eliminated against the investment in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

5.5 Foreign currency 5.5.1 Foreign currency transactions and translation Transactions in foreign currencies are translated to EUR at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to EUR at the foreign exchange rate at that date.

Fugro Annual accounts 2009 89 Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to EUR at foreign exchange rates effective at the date the fair value was determined. Foreign currency differences arising on translation are recognised in profit or loss, except for differences arising on the (re-)translation of available-for-sale equity instruments or a financial liability designated as a hedge of the net investment in a foreign operation, which are recognised in other comprehensive income.

A summary of the main currency exchange rates applied in the year under review and the preceding years reads as follows:

USD at USD GBP at GBP year-end average year-end average

2009 0.69 0.72 1.13 1.13

2008 0.71 0.68 1.05 1.25

2007 0.68 0.73 1.36 1.46

2006 0.76 0.79 1.49 1.47

2005 0.85 0.81 1.46 1.46

5.5.2 Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to EUR at foreign exchange rates effective at the reporting date. The income and expenses of foreign operations are translated to EUR at exchange rates effective at the dates of the transactions. Foreign exchange differences arising on translation are recognised directly in the Translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the Translation reserve is transferred to profit or loss as part of the profit or loss on disposal.

5.5.3 Hedge of net investment in foreign operations The Group applies hedge accounting to foreign currency differences arising between the functional currency of the foreign operation and the functional currency of the Company (EUR), regardless of whether the net investment is held directly or through an intermediate parent. Foreign currency differences arising on the (re-)translation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income to the extent that the hedge is effective, and are presented within equity in the Translation reserve. To the extent that the hedge is ineffective, such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the Translation reserve is transferred to profit or loss as part of the profit or loss on disposal.

5.6 Determination of fair values Some of the Group’s accounting policies and disclosures require the determination of fair values, for both financial and non-financial assets and liabilities. Additional information on the determination of fair values is disclosed in the notes of the specific asset or liability, if applicable.

5.6.1 Property, plant and equipment The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper

90 marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based on the quoted market prices for similar items when available and replacement cost when appropriate.

5.6.2 Intangible assets The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

5.6.3 Inventories The fair value of inventory (including seismic libraries) acquired in a business combination is determined based on its estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventory.

5.6.4 Investments in equity and debt securities The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date.

5.6.5 Trade and other receivables The fair value of trade and other receivables, at initial recognition, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.

5.6.6 Derivatives The fair value of forward exchange contracts is based on the listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and counterparty when appropriate.

5.6.7 Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future repayments and interest cash flows, discounted at the market rate of interest at the reporting date.

5.6.8 Share-based payment transactions The fair value of the employee share options are measured using a binomial model. Measurement inputs include share price on measurement date (year-end date of granting year), exercise price of the instrument, expected volatility (based on weighted average historic volatility over the period 1993 through the reporting date adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

Fugro Annual accounts 2009 91 5.7 Derivative financial instruments and hedging 5.7.1 Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to foreign exchange risks arising from operational and financing activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. Derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, if a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and if the combined instrument is not measured at fair value through profit or loss. On initial designation of a hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be ‘highly effective’ in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 %. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or loss. Derivative financial instruments are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, measurement of derivative financial instruments is at fair value. The gain or loss on remeasurement at fair value is recognised immediately in profit or loss except when hedge accounting is applied. Recognition of any resultant gain or loss on hedge accounting depends on the nature of the item being hedged (refer to accounting policy 5.7.2 and beyond).

5.7.2 Cash flow hedges When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecast transaction that could ultimately affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the Hedging reserve in equity. The amount recognised in the Hedging reserve is removed and included in profit or loss in the same period as the hedged cash flows affect profit or loss under the same line item in the statement of comprehensive income as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires, is sold, is terminated, is exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive income and presented in the Hedging reserve in equity remains there until the forecast transaction affects profit or loss. When the hedged item is a non-financial asset, the amount recognised in other comprehensive income is transferred to the carrying amount of the asset when the asset is recognised. If the forecast transaction is no longer expected to occur, then the balance in the Hedging reserve is recognised immediately in profit or loss. In other cases the amount recognised in the Hedging reserve is transferred to profit or loss in the same period that the hedged item affects profit or loss.

5.7.3 Other non-trading derivatives Where a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognised immediately in profit or loss.

92 5.8 Property, plant and equipment 5.8.1 Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (refer accounting policy 5.15). The cost of property, plant and equipment includes any costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs. Self-constructed assets include also the cost of materials and direct labour. Property, plant and equipment that is being constructed or developed for future use is classified as property, plant and equipment under construction and stated at cost until construction or development is complete, at which time it is reclassified as land and buildings, plant and equipment, vessels or other property, plant and equipment. Where an item of property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items. Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment. Gains are recognised within ‘other income’ in profit or loss, losses are recognised within ‘other expenses’ in profit or loss.

5.8.2 Leased assets Leases with terms in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (refer accounting policy 5.8.4) and impairment losses (refer accounting policy 5.15). Subsequent measurement is in accordance with the applicable accounting policy. Operating leases are not recognised in the Group’s statement of financial position. Lease payments are accounted for as described in accounting policy 5.22.2.

5.8.3 Subsequent cost The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in profit or loss as incurred.

5.8.4 Depreciation Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

Fugro Annual accounts 2009 93 Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted if appropriate. The estimated useful life of the different items of property, plant and equipment are:

Category Years

Land and buildings Land Infinite Buildings 20 – 40 Fixtures and fittings 5 – 10

Vessels Vessels and jack-ups 2 – 25

Plant and equipment Plant and equipment 4 – 10 Survey equipment 3 – 5 Aircraft 5 – 10 AUVs and ROVs 6 – 7 Computers and office equipment 3 – 4 Transport equipment 4

Other Maintenance 3 – 5 Used plant and machinery 1 – 2

5.9 Intangible assets 5.9.1 Goodwill As part of its transition to IFRS the Group elected to restate only those business combinations that occurred on or after 1 January 2003. In respect of acquisitions prior to 1 January 2003, goodwill represents the amount recognised under the Group’s previous accounting framework, Dutch GAAP. All business combinations are accounted for by applying the ‘purchase accounting method’. Goodwill subsequent to 1 January 2003 represents amounts arising on acquisition of subsidiaries and equity accounted investees. In respect of business acquisitions, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets, liabilities and contingent liabilities acquired. The excess of the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities over cost is recognised directly in profit or loss. Goodwill arising on the acquisition of a non-controlling interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortised but is tested for impairment annually or when there is an indication for impairment (refer accounting policy 5.15). In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

5.9.2 Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss when incurred. The Group spends significant amounts on research. Since the majority of these activities take place within contracts with third parties it is not feasible to properly determine the total costs spent for these technical developments. Expenditure on development activities, whereby research findings are applied to a plan or design for new or improved software or other intangible assets, is capitalised if the product is technically and commercially feasible and the Group

94 has sufficient resources to complete development. The capitalised expenditure includes the cost of materials, direct labour, an attributable proportion of direct overheads and capitalised borrowing costs. Capitalised development expenditure is stated at cost less accumulated amortisation and accumulated impairment losses (refer accounting policy 5.15).

5.9.3 Software and other intangible assets Software and other intangible assets acquired or developed by the Group are stated at cost less accumulated amortisation and impairment losses (refer accounting policy 5.15).

5.9.4 Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill, is expensed as incurred.

5.9.5 Amortisation Amortisation is calculated over the cost of the asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill and intangibles assets with an indefinite life are systematically tested for impairment annually or when there is an indication for impairment (refer accounting policy 5.15). Other intangible assets and software are amortised from the date they are available for use. The estimated useful life of software and other capitalised development costs is five years. Amortisation methods, useful lives and residual values are reassessed at each financial year-end and adjusted if appropriate.

5.10 Investments in equity accounted investees Investments in equity accounted investees are accounted for using the equity method and are recognised initially at cost. The Group’s investment includes goodwill identified on acquisition, net of any accumulated impairment losses (refer accounting policy 5.15). The consolidated financial statements include the Group’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or has made payments on behalf of the investee.

5.11 Other investments 5.11.1 Other investments in equity instruments Other investments in equity instruments do not have a quoted market price in an active market. As the fair value cannot be reliably measured the equity instruments are stated at cost. Dividends received are accounted for in profit or loss when these become due.

5.11.2 Long-term loans and other receivables Long-term loans and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market. The initial recognition of loans and receivables takes place on the date that they are originated at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses (refer accounting policy 5.15).

5.11.3 Available for sale financial assets Available for sale financial assets are non-derivative financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences, are recognised in other comprehensive income and presented within equity. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit or loss.

Fugro Annual accounts 2009 95 5.12 Inventories 5.12.1 Seismic data libraries The seismic data libraries consist of completed and in progress collection of seismic data that can be sold non- exclusively to one or more clients. These seismic data libraries are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Costs include direct costs and an attributable portion of direct overheads, but exclude a profit element. As it is expected that sales lead to a lower net realisable value, these expected decreases in value are taken into account at the moment of sale throughout the financial year. The Group evaluates the net realisable value on a regular basis and reassesses the net realisable value at each reporting date.

5.12.2 Other inventories Other inventories are stated at the lower of cost or net realisable value. The cost of other inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

5.13 Trade and other receivables Services rendered on contract work completed but not yet billed to customers are included in trade and other receivables as unbilled revenues on completed contracts. Trade and other receivables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method less, any impairment losses (refer accounting policy 5.15).

5.14 Cash and cash equivalents Cash and cash equivalents, comprising cash balances and call deposits, are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method less, any impairment losses (refer accounting policy 5.15). Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

5.15 Impairment 5.15.1 Financial assets Financial assets are assessed at each reporting date to determine whether there is objective evidence that they are impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

96 Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income, and presented in equity, to profit or loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value. Changes in impairment provisions attributable to time value are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale investment increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss.

5.15.2 Non-financial assets The carrying amounts of assets other than inventories, assets arising from employee benefits and deferred tax assets (refer accounting policy 5.23), are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill, intangible assets with an indefinite useful life and intangible assets that are not available for use, the recoverable amount is estimated each year at the same time or when there is an indication for impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (cash-generating unit). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, cash-generating units to which goodwill has been allocated, are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of cash generating units that are expected to benefit from the synergies of the combination. The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the cash generating units to which the corporate asset belongs. An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if the estimates used to determine the recoverable amount have been changed. Prior period impairments are reviewed at each reporting date to determine if there is an indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

5.16 Share capital 5.16.1 Share capital Share capital is classified as equity. The term ‘shares’ as used in the Annual Accounts should, with respect to shares issued by Fugro N.V., be construed to include certificates for shares (also referred to as depositary receipts for shares) issued by ‘Stichting Administratiekantoor Fugro’ (also referred to as Fugro Trust Office Foundation or Fugro Trust Office), unless the context otherwise requires or unless it is clear from the context that this is not the case. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Fugro Annual accounts 2009 97 5.16.2 Repurchase and sale of shares When shares are repurchased or sold, the amount of the consideration paid or received, including direct attributable costs, is recognised as a change in equity. Repurchased shares and related results are reported as reserve for own shares and presented separately as a component of total equity.

5.16.3 Dividends Dividends are recognised as a liability in the period in which they are declared.

5.17 Loans and borrowings Loans and borrowings are recognised initially at fair value, less attributable transaction costs. Subsequent to initial recognition, borrowings are stated at amortised cost using the effective interest rate method.

5.18 Employee benefits 5.18.1 Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

5.18.2 Defined benefit plans The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine the present value. Any unrecognised past service costs and the fair value of plan assets are deducted. The discount rate is the yield at each financial year-end on high quality corporate or government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed by qualified actuaries using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss. The Group recognises all actuarial gains and losses arising from defined benefit plans directly in other comprehensive income.

5.18.3 Other long-term employee benefits The Group’s net obligation in respect of long-term employee benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted based on the yield at the reporting date on high quality corporate or government bonds that have maturity dates approximating the terms of the Group’s obligations. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.

98 5.18.4 Share-based payment transactions The share option programme allows Group employees to acquire shares of the Company. The fair value of options is measured at grant date and recognised as an employee expense with a corresponding increase in equity over the period during which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted annually to reflect the estimated number of share options that will be exercised.

5.19 Provisions A provision is recognised when the Group has a legal or constructive obligation as result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

5.19.1 Restructuring A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

5.19.2 Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

5.20 Trade and other payables Trade and other payables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

5.21 Revenue Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services rendered in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, rebates and discounts and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue can be measured reliably, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

5.21.1 Services rendered Revenue from services rendered to third parties relate to fixed price contracts and ‘cost plus’ contracts (mainly daily rates or rates per (square) kilometre). This revenue is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed using the proportion of contract cost incurred for work performed to the reporting date, compared to total contract cost (as this method is most appropriate for the majority of the services provided by the Group), which are mainly based on daily rates for staff and equipment or rates per (square) kilometre for vessels and airplanes.

Fugro Annual accounts 2009 99 5.21.2 Sales of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs of goods can be estimated reliably, and there is no continuing management involvement with the goods. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or associated costs. An expected loss on a contract is recognised immediately in profit or loss.

5.21.3 Seismic data Revenue from the sale of non-exclusive seismic data libraries is recognised in the period when the data has been collected, processing has been completed and data has (substantially) been delivered to the client. Pre-commitments on seismic data library sales are recorded as advance instalments. When data collection has commenced, revenue is recognised based on the stage of completion. Separate (service) components/deliverables, such as annual maintenance fees or training fees, are accounted for over the period in which these services have been delivered to the customer, using a straight line basis over the term of the contract.

5.21.4 Software licences and subscription income Software licences and subscription income are recognised in the period during which the underlying services have been provided, using a straight line basis over the term of the contract.

5.21.5 Net revenue own service (revenue less third party costs) Net revenue own service comprise all revenue minus costs incurred with third parties related to the employment of resources (in addition to the resources deployed by the Group) and other third party cost such as charter lease costs and other cost required for the execution of various projects.

5.21.6 Other income Other income concerns income not related to the key business activities of the Group, such as income from the sale of non-monetary assets and/or liabilities, exceptional and/or non-recurring income.

5.21.7 Government grants Government grants are initially recognised as deferred income when there is reasonable assurance that they will be received and that the Group will comply with the conditions attached to them. Grants that compensate the Group (partly) for expenses incurred are recognised in the profit or loss on a systematic basis in the same periods in which the expenses are incurred. Grants that (partly) compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset.

5.22 Expenses 5.22.1 Third party costs Third party costs are matched with related revenues on contracts and accounted for on a historical cost basis.

5.22.2 Operating lease payments Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease.

5.22.3 Net finance costs Net finance costs comprise interest expense on borrowings calculated using the effective interest rate method, unwinding of the discount on provisions, interest income on funds invested, dividend income and foreign exchange gains and losses.

100 Interest income is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in profit or loss on the date the entity’s right to receive the payments is established which in the case of quoted shares is the ex-dividend date. Exchange gains and losses are reported on a net basis.

5.23 Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income, in which case it is recognised in equity or other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the end of the reporting period, and any adjustment to tax in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

5.24 Statement of cash flows The consolidated statement of cash flows is prepared using the indirect method. The cash flow statement distinguishes between operating, investing and financing activities. Cash flows in foreign currencies are converted at the exchange rate at the dates of the transactions. Currency exchange differences on cash held are separately shown. Payments and receipts of corporate taxes are included as cash flow from operating activities and interest paid is shown as cash flow from operating activities. Cash flows as a result from acquisition/ divestment of financial interest in subsidiaries and equity accounted investees are included as cash flow from investing activities, taking into account the available cash in these interests. Dividends paid are part of the cash flow from financing activities.

5.25 Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s Executive Committee to make decisions about resources to be allocated to the segment and assess its performance, for which discrete financial information is available.

Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly deferred tax, loans and borrowings and corporate assets and expenses. Segment capital expenditure is the total amount incurred during the period to acquire segment assets that are expected to be used for more than one period.

Fugro Annual accounts 2009 101 5.25.1 Operating segments As an engineering firm with operations throughout the world, the Group delivers its services to clients located all over the globe and collects and interprets data related to the earth’s surface and the soil and rock beneath. On the basis of this data the Group provides advice, generally for purposes related to the oil and gas industry, the mining industry and the construction industry. The Group has three reportable segments, which are the Group’s divisions. The divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the divisions, the Executive Committee reviews internal management reports on a monthly basis. The following summary describes the operations in each of the Group’s reportable segments:

Geotechnical The Geotechnical division investigates the engineering properties and geological characteristics of soils and rocks using (in-house) developed proprietary technologies, provides advice regarding foundation design and provides construction materials testing. These services support clients’ projects worldwide in the onshore, near shore and offshore environments, including deep water. Typical projects include support of infrastructure development, construction, flood protection and the design of oil and gas installations.

Survey The Survey division provides a range of services to support the activities of the oil and gas industry and a range of other clients including government agencies, the construction and transportation sectors and agriculture. Offshore services include geophysical investigation for geohazards, pipeline and cable route surveys and inspection, construction support services, hydrographic charting, meteorology and oceanographic studies. Subsea services revolve around the use of remotely operated vehicles (ROVs) to support subsea inspection, construction and drilling. Geospatial services are focused on land survey and aerial/satellite mapping services for a wide range of clients. In addition, Fugro’s global positioning systems (which augment GPS and Glonass to provide precise positioning in real-time world-wide) are employed not only to support the above services, but are also provided on a subscription basis to other industries such as agriculture.

Geoscience The Geoscience division concentrates on collecting, processing, interpreting, managing and storing geophysical and geological data. These data sets are used for evaluating the presence of natural resources, including oil, gas, water and minerals, and for optimising the exploration, development and production of those resources. A broad range of geophysical data sets are collected including marine seismic, gravity, magnetics and electromagnetics. The data sets are collected at sea, from the air and on land using vessels, low flying airplanes and helicopters. Clients are oil and gas companies, mining companies and governmental organisations.

The segments are managed on a worldwide basis, and operate in four principal geographical areas, The Netherlands, Europe other/Africa, Middle East/Asia/Australia and the Americas. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of operating companies. The allocation of segment assets is based on the geographical location of the assets.

102 Operating segments (EUR x 1,000) Geotechnical Survey Geoscience Total

2009 2008 2009 2008 2009 2008 2009 2008

Revenue 573,614 588,618 995,119 988,945 583,409 683,001 2,152,142 2,260,564 Of which inter-segment revenue 37,855 47,424 38,886 29,337 22,413 29,329 99,154 106,090

Segment result 122,987 119,679 295,734 278,200 146,649 189,643 565,370 587,522 Finance income (1,320) (3,338) (3,194) (8,492) (2,785) (23,765) (7,299) (35,595) Finance expense 4,737 3,336 6,020 5,546 18,932 6,608 29,689 15,490 Share of profit of equity accounted investees 35 (1) – – – – 35 (1) Depreciation 28,678 24,151 48,854 42,837 32,080 27,781 109,612 94,769 Amortisation intangible assets 533 380 655 254 8,927 8,048 10,115 8,682

Reportable segment profit or (loss) before income tax 90,324 95,151 243,399 238,055 89,495 170,971 423,218 504,177

Reportable segment assets 523,271 410,311 845,056 752,782 914,789 853,048 2,283,116 2,016,141 Reportable segment liabilities 214,665 204,267 268,434 487,140 479,150 565,814 962,249 1,257,221 Capital expenditure, property, plant and equipment 192,226 31,295 82,244 103,844 38,382 169,565 312,852 304,704 Capital expenditure intangible assets 6,527 39,332 8,653 20,328 14,401 33,300 29,581 92,960 Significant non-cash expenses (Impairment losses on trade receivables and seismic data libraries) – 5,024 – 8,908 – 11,468 – 25,400

Geographical segments Middle (EUR x 1,000) Netherlands Europe other/Africa East/Asia/Australia Americas Consolidated

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Revenue from external customers 133,776 144,922 985,074 1,081,806 419,948 425,794 514,190 501,952 2,052,988 2,154,474

Non-current assets 203,042 208,997 610,837 569,696 555,798 362,787 216,817 200,273 1,586,494 1,341,753

Fugro Annual accounts 2009 103 Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items (EUR x 1,000) 2009 2008

Revenues Total revenue of reportable segments 2,152,142 2,260,564 Elimination of inter-segment revenue (99,154) (106,090)

Consolidated revenue 2,052,988 2,154,474

Profit or loss Total profit or (loss) for reportable segments before income tax 423,218 504,177 Unallocated amounts: – Other corporate expenses (78,221) (98,339) – Net finance costs 2,023 (21,486) – Share of profit of equity accounted investees 457 (103)

Consolidated profit before income tax 347,477 384,249

Assets Total assets for reportable segments 2,283,116 2,016,141 Other unallocated amounts 83,201 107,165

Consolidated assets 2,366,317 2,123,306

Liabilities Total liabilities for reportable segments 962,249 1,257,221 Other unallocated amounts 204,558 (69,726)

Consolidated liabilities 1,166,807 1,187,495

Other material items 2009 Adjust- ments Report­ and other able unallo­ Consoli- segment cated dated (EUR x 1,000) totals amounts totals

Finance income (7,299) 125 (7,174) Finance expense 29,689 (2,148) 27,541 Depreciation 109,612 63,981 173,593 Amortisation intangible assets 10,115 – 10,115

104 5.26 Acquisitions and divestments of subsidiaries 5.26.1 Acquisitions 2009 The Group acquired a 100% interest in the following companies, assets and activities: Number Annual of employ- (EUR x million) Price Goodwill Country Division revenue ees Consoli­dation per

LoadTest 10.9 5.5 USA Geotechnical 13.5 40 January Divestco 3.5 2.5 Canada Geoscience 2.2 12 March VIB Weinhold 3.3 3.1 Germany Survey 3.0 26 April Interaction 4.7 4.1 Norway Geoscience 0.6 8 April Tenix LADS 12.6 3.0 Australia Survey 12.5 60 August General Robotics 0.6 0.3 UK Survey 1.0 12 September Submec 0.5 0.1 Australia Survey 1.0 10 October Sea Development 1.6 1.6 Norway Geoscience 1.0 – October Adjustments prior years (0.2) (0.2)

Total 37.5 20.0 34.8 168

5.26.1.1 LoadTest Fugro acquired the LoadTest group of companies, headquartered in Gainesville, Florida, USA and subsidiaries in Singapore, South Korea and United Kingdom. LoadTest is the world’s leading provider of static pile load testing services, using the proprietary bi-directional Osterberg Cell® load testing method.

5.26.1.2 Divestco Fugro has acquired the assets and activities in Canada from Divestco Inc. - providing online archiving and technical records management. The purchase of these assets is complimentary to the other acquisitions in Calgary and provides an expansion of the online data centre capacity.

5.26.1.3 VIB Weinhold Fugro has acquired ‘VIB Weinhold’, a leading supplier of pipeline survey. The company’s activities comprise the planning, survey and documentation of transport and distribution networks, gas plants and power plants for private and public energy companies.

5.26.1.4 Interaction Interaction A/S, Norway, specialises in marine electromagnetic data management and processing. The company is known for its Sharkware brand of software products.

5.26.1.5 Tenix LADS Fugro acquired the Tenix LADS business from the Australian based company Tenix Pty Ltd. Tenix LADS is a leading global provider of Airborne Hydrographic services, which uses lasers to measure water depths. The laser technology (known as LIDAR) in use is a LADS proprietary system.

5.26.1.6 General Robotics General Robotics Limited, United Kingdom, is a provider of high performance dynamic simulation and visualisation software for the offshore oil and gas industry.

5.26.1.7 Submec Fugro acquired the business and assets of Submec Pty Ltd., Australia, which is engaged in subsea engineering and ROV tooling services.

Fugro Annual accounts 2009 105 5.26.1.8 Sea Development Fugro acquired Sea Development A/S in Sandnessjoen, Norway. The company has been renamed to Fugro Coastal Response Services A/S. Sea Development A/S has developed a concept for the next generation of coastal response vessels.

5.26.2 Divestments In 2009 no divestments took place.

5.26.3 Effect of acquisitions The acquisitions had the following effects on the Group’s assets and liabilities:

Recog- Pre-­ nised acquisi- values on tion Fair value acquisi- carrying adjust- tions (EUR x 1,000) amount ments 2009

Property, plant and equipment 9,963 (81) 9,882 Intangible assets 1,673 2,580 4,253 Other fixed assets 233 – 233 Inventories 3,272 – 3,272 Trade and other receivables 4,464 – 4,464 Current tax receivables 277 250 527 Deferred taxes (565) (613) (1,178) Cash and cash equivalents 1,697 – 1,697 Loans and borrowings (1,258) – (1,258) Current tax liabilities (897) – (897) Trade and other payables (3,446) – (3,446)

Net identifiable assets and liabilities 15,413 2,136 17,549 Goodwill/(negative goodwill) on acquisition 19,957 Considerations payable (3,886)

Consideration paid/(received), in cash 33,620 Cash (acquired)/disposed of (1,697)

Net cash outflow/(inflow) 31,923

Acquisitions have been combined in this table as none of them individually is considered to be material. Furthermore, the acquisitions 2009 include an amount of EUR 0.2 million relating to prior period adjustments due to the finalisation of the purchase price allocation procedures (2008: EUR 9.3 million). If all acquisitions in 2009 had been effected at the beginning of 2009, the revenue of the Group would have been around EUR 7 million higher. The acquisitions in 2009 contributed EUR 0.6 million positive to the profit of Fugro N.V. On a full year basis this would approximately amount to EUR 0.6 million negative. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2009.

106 The goodwill from the acquisitions is attributable mainly to market share, the skills and technical talent of the acquired business’ work force, and the synergies expected to be achieved from integrating the companies into the Group’s existing business. The fair value of acquired assets and (contingent) liabilities related to the acquisitions is provisional pending the receipt of final valuations.

5.27 Government grants The Company has not been awarded any significant government grants in 2009.

5.28 Third party costs (EUR x 1,000) 2009 2008

Cost of suppliers 352,566 453,531 Operational lease expenses 156,182 152,315 Seismic data libraries 63,987 55,338 Other costs 51,678 61,137

624,413 722,321

5.29 Other income (EUR x 1,000) 2009 2008

Government grants 1,057 441 Gain on disposal of property, plant and equipment 4,059 2,687 Sundry income 19,324 14,713

24,440 17,841

5.30 Personnel expenses (EUR x 1,000) 2009 2008

Wages and salaries 555,784 536,120 Compulsory social security contributions 59,858 55,231 Equity-settled share-based payment transactions 9,094 6,656 Contributions to defined contribution plans 18,459 14,836 Expense related to defined benefit plans 9,123 5,645 Increase in liability for long service leave 489 658

652,807 619,146

5.30.1 Share-based payments The Group’s remuneration policy includes a share option scheme. An option entitles the employee to buy a (certificate of a) share in Fugro N.V. Option rights are granted on the basis of the employee’s contribution towards the development of the Group’s long-term strategy. Option rights are granted to employees who have been working with the Group for twelve months prior to granting of the options. The Group stipulates that in addition to the services provided in the twelve months prior to the granting of the options services also must be provided in the future. Employees with option rights are allowed to exercise the option rights only after three years of employment, subsequent to granting, with the Group (the ‘vesting period’). The options have a term of six years subsequent to the grant date.

Fugro Annual accounts 2009 107 The Board of Management and Supervisory Board decide annually on the granting of the option rights. The exercise price of the options is set at grant date and equals the closing stock price of certificates of shares at Euronext Amsterdam at the last trade day of the year of granting. The costs of the option rights are recognised in profit or loss over the related period of employment (four years).

For options granted before 31 December 2007 a difference exists between conditions for Dutch residents and foreign residents. Option rights to Dutch residents are unconditional; the option rights can be exercised immediately notwithstanding a 90% fine on the profit, which is retained by the Group. Costs related to these options were recognised in profit or loss in the year of granting. For foreign residents option rights are conditional; exercise of the option rights is only possible after a three years vesting period. The costs of the option rights are recognised in profit or loss over the related period of employment (four years).

The weighted average stock price on Euronext Amsterdam during 2009 was EUR 31.11 (2008: EUR 43.64). As at 31 December 2009, Fugro N.V. granted 1,166,550 option rights to 639 employees. These option rights have an exercise price of EUR 40.26 (2008: 1,141,900 options were granted to 620 employees with an exercise price of EUR 20.485).

In 2009 Fugro N.V. sold 800,920 certificates of shares in relation to exercise of option rights. During 2009 the Group has not issued (certificates of) shares for the exercise of option rights (2008: nil). The (certificates of) shares sold had an average purchase price of EUR 22.49 per certificate. The related option rights were exercised throughout the year, with the exception of determined closed periods.

As at 31 December the following option rights were outstanding:

Out­ Out­ Exercis­ Number standing standing able at Exercise of partici- at 01-01- Forfeited Exercised at 31-12- 31-12- price Year of issue Duration pants Granted 2009 in 2009 in 2009 2009 2009 (EUR)

2003 6 years 429 1,002,600 598,600 3,200 595,400 – – 10.20 2004 6 years 493 1,064,800 887,700 3,800 156,120 727,780 727,780 15.35 2005 6 years 521 1,155,000 1,116,100 3,400 49,400 1,063,300 1,063,300 27.13 2006 6 years 547 1,140,500 1,114,700 5,000 – 1,109,700 566,050 36.20 2007 6 years 565 1,140,500 1,134,550 5,400 – 1,129,150 – 52.80 2008 6 years 620 1,141,900 1,141,900 3,950 – 1,137,950 – 20.485 2009 6 years 639 1,166,550 – – – 1,166,550 – 40.26

7,811,850 5,993,550 24,750 800,920 6,334,430 2,357,130

108 The outstanding option rights as at 31 December 2009 have an exercise price ranging from EUR 15.35 to EUR 52.80. The average remaining term of the options is four years (2008: four years). The movement during the year of option rights and average exercise price is as follows:

2009 2008

Weighted Weighted average average exercise exercise price Number of price Number of (EUR) options (EUR) options

Options outstanding at 1 January 28.97 5,993,550 28.67 5,524,020 Forfeited during the period 30.22 (24,750) 38.27 (18,350) Options granted during the period 40.26 1,166,550 20.485 1,141,900 Options exercised during the period 12.25 (800,920) 11.87 (654,020)

Options outstanding at 31 December 33.17 6,334,430 28.97 5,993,550

Exercisable at 31 December 2,357,130 2,687,950

The valuation of the share option rights is determined by using a binomial model. Concerning early departure, different percentages for different categories of staff are used: Directors 1%, Executive Committee members 2%, managers of operating companies 7%. The expected behaviour for exercising the options by the Directors is estimated till the end of the vesting period and for the other two groups with a multiple of three. The inputs used in the measurement of the fair values at grant date of the option rights are the following:

2009 2008

Average share price during the year in EUR 31.11 43.64 Average fair value of the options issued during the year in EUR 10.84 5.54 Exercise price (fair value at grant date) in EUR 40.26 20.485 Granting 2009 2008 Expected volatility 38% 38% Expected dividends 3.38% 3.33% Risk-free interest rate 3.01% 3.37%

Costs of granted option rights at the end of 2005 in EUR – 715,040 Costs of granted option rights at the end of 2006 in EUR 1,067,164 1,067,164 Costs of granted option rights at the end of 2007 in EUR 3,291,433 3,291,433 Costs of granted option rights at the end of 2008 in EUR 1,582,401 1,582,401 Costs of granted option rights at the end of 2009 in EUR 3,153,277 –

Total 9,094,275 6,656,038

Fugro Annual accounts 2009 109 5.30.2 Number of employees as at 31 December 2009 2008

Nether- Nether- lands Foreign Total lands Foreign Total

Technical staff 635 9,677 10,312 686 9,777 10,463 Management and administrative staff 141 2,542 2,683 133 2,425 2,558 Temporary and contract staff 171 316 487 159 447 606

947 12,535 13,482 978 12,649 13,627

Average number of employees during the year 935 12,652 13,587 957 12,020 12,977

5.31 Other expenses (EUR x 1,000) 2009 2008

Maintenance and operational supplies 75,106 83,111 Indirect operating expenses 55,231 56,831 Occupancy costs 43,730 37,989 Communication and office equipment 30,060 30,489 Restructuring costs 367 1,146 Loss on disposal of property, plant and equipment 1,127 709 Other 43,457 85,395

249,078 295,670

Audit fees, presented under other expenses, charged by KPMG are disclosed in note 9.13.

5.32 Net finance costs (EUR x 1,000) 2009 2008

Interest income on loans and receivables (4,862) (4,646) Dividend income on available for sale financial assets (2,312) (185) Net foreign exchange variance – (25,775)

Finance income (7,174) (30,606)

Interest expense on financial liabilities measured at amortised cost 12,544 31,987 Net change in fair value of financial assets at fair value through profit or loss 1,639 – Net foreign exchange variance 13,358 –

Finance expense 27,541 31,987

Net finance costs recognised in profit or loss 20,367 1,381

In the 2008 Financial Statements, the foreign currency exchange gain amounting to EUR 25,775 thousand was presented under finance expenses. This amount is reclassified to finance income in the comparative figures of the present financial statements.

110 Furthermore, as from the current financial statements the financial income and expenses related to defined benefit plans are presented under personnel expenses. The comparative figures are restated in this respect.

(EUR x 1,000) 2009 2008

Recognised in other comprehensive income Effective portion of change in fair value of hedge of net investment in foreign operations 1,788 (2,682) Foreign currency translation differences of foreign operations 47,680 (52,762)

49,468 (55,444) Net change in fair value of cash flow hedges transferred to profit or loss 1,034 1,032 Change in fair value of financial assets available for sale 1,879 (2,526)

Total 52,381 (56,938)

Recognised in: Hedging reserve 1,034 1,032 Translation reserve 49,468 (55,444) Other reserves 1,879 (2,526)

Total 52,381 (56,938)

5.33 Income tax expense Recognised in profit or loss (EUR x 1,000) 2009 2008

Current tax expense Current year 69,726 96,460 Adjustments for prior years (3,486) (2,607)

66,240 93,853

Deferred tax expense Origination and reversal of temporary differences 9,337 1,131 Recognition of previously unrecognised temporary differences (773) – Reduction in tax rate – 503 Utilisation of tax losses recognised 1,733 36 Recognition of previously unrecognised tax losses (1,208) (700) Effect of write-down deferred tax assets 149 (30) Adjustments for prior years (1,066) –

8,172 940

Total income tax expense 74,412 94,793

Fugro Annual accounts 2009 111 Reconciliation of effective tax rate 2009 2009 2008 2008 (EUR x 1,000) % %

Profit for the period 273,065 289,456 Income tax expense 74,412 94,793

Profit before income tax 347,477 384,249

Income tax using the weighted domestic average tax rates 22.8 79,644 24.2 92,471 Recognition of previously unrecognised temporary differences (0.2) (773) 0.0 – Reduction in tax rate – – 0.1 503 Recognition of previously unrecognised tax losses (0.3) (1,208) (0.2) (700) Effect of write-down deferred tax assets 0.0 149 0.0 (30) Non-deductible expenses 0.8 2,643 3.0 11,667 Tax exempt income (0.3) (1,052) (0.5) (1,877) Effect of utilisation previously unrecognised tax losses (0.1) (439) (1.2) (4,634) Adjustments for prior years (deferred) (0.3) (1,066) – – Adjustments for prior years (current) (1.0) (3,486) (0.7) (2,607)

21.4 74,412 24.7 94,793

The weighted average domestic tax rate decreased from 24.2% to 22.8%. Improvement of results above expectations in certain tax jurisdictions resulted in utilisation of EUR 0.4 million (2008: EUR 4.6 million) of previously unrecognised tax losses. Adjustments for prior years relate to settlement of outstanding tax returns of several years and various fiscal tax entities as well as the recognition of tax liabilities for fiscal positions taken that are currently being challenged or probably will be challenged by tax authorities.

Income tax recognised in other comprehensive income (EUR x 1,000) 2009 2008

Tax (ex- Tax (ex- pense)/ pense)/ Before tax benefit Net of tax Before tax benefit Net of tax

Actuarial gains and losses (14,493) 4,044 (10,449) (32,279) 9,050 (23,229) Change in fair value of (cash flow) hedges 3,788 (966) 2,822 (2,215) 565 (1,650) Relating to share option rights 9,037 1,394 10,431 10,655 – 10,655 Exchange rate differences 45,515 2,002 47,517 (50,057) (1,787) (51,844)

43,847 6,474 50,321 (73,896) 7,828 (66,068)

Reference is also made to note 5.40.

5.34 Current tax assets and liabilities The net current tax liability of EUR 36,200 (2008: EUR 68,228) represents the balance of income tax payable and receivable in respect of current and prior periods less advance tax payments.

112 5.35 Property, plant and equipment (EUR x 1,000) 2009

Fixed assets Plant and under Land and equip- construc- buildings ment Vessels tion Other Total

Cost Balance at 1 January 2009 134,881 778,442 298,239 138,227 174,509 1,524,298 Acquisitions through business combinations 1,268 13,212 – 337 2,252 17,069 Investments in assets under construction – – – 255,350 – 255,350 Other additions 15,550 40,848 23,914 – 14,040 94,352 Capitalised fixed assets under construction – 82,921 143,089 (226,010) – – Disposals (629) (7,449) (12,138) – (1,077) (21,293) Effects of movement in foreign exchange 4,530 20,395 (2,915) (3,585) 2,130 20,555

Balance at 31 December 2009 155,600 928,369 450,189 164,319 191,854 1,890,331

Depreciation and impairment losses Balance at 1 January 2009 37,349 402,909 87,280 – 137,672 665,210 Acquisitions through business combinations* 5 5,594 – – 1,588 7,187 Depreciation 6,232 116,150 30,302 – 20,909 173,593 Disposals (5) (3,997) (4,510) – (762) (9,274) Effects of movement in foreign exchange 524 12,321 (2,294) – (163) 10,388

Balance at 31 December 2009 44,105 532,977 110,778 – 159,244 847,104

Carrying amount At 1 January 2009 97,532 375,533 210,959 138,227 36,837 859,088

At 31 December 2009 111,495 395,392 339,411 164,319 32,610 1,043,227

* Including fair value adjustments.

Fugro Annual accounts 2009 113 (EUR x 1,000) 2008

Fixed assets Plant and under Land and equip- construc- buildings ment Vessels tion Other Total

Cost Balance at 1 January 2008 118,997 617,837 177,089 79,404 166,664 1,159,991 Acquisitions through business combinations 440 11,256 5,769 124 2,885 20,474 Investments in assets under construction – – – 217,988 – 217,988 Other additions 22,746 93,743 20,492 – 25,021 162,002 Capitalised fixed assets under construction – 74,069 86,975 (161,044) – – Disposals (408) (19,000) (982) – (11,667) (32,057) Effects of movement in foreign exchange (6,894) 537 8,896 1,755 (8,394) (4,100)

Balance at 31 December 2008 134,881 778,442 298,239 138,227 174,509 1,524,298

Depreciation and impairment losses Balance at 1 January 2008 33,111 330,354 64,110 – 133,118 560,693 Acquisitions through business combinations* 174 4,234 – – 1,643 6,051 Depreciation 5,304 93,351 21,538 – 20,236 140,429 Disposals (721) (15,886) (503) – (10,900) (28,010) Effects of movement in foreign exchange (519) (9,144) 2,135 – (6,425) (13,953)

Balance at 31 December 2008 37,349 402,909 87,280 – 137,672 665,210

Carrying amount At 1 January 2008 85,886 287,483 112,979 79,404 33,546 599,298

At 31 December 2008 97,532 375,533 210,959 138,227 36,837 859,088

* Including fair value adjustments.

5.35.1 Impairment loss and subsequent reversal The Group has not incurred nor reversed any impairment losses.

5.35.2 Fixed assets under construction This involves mainly vessels under construction (Fugro Symphony, Fugro Searcher and Geo Coral) and ROVs. The vessels will become operational in 2010 and 2011; the ROVs in principle in 2010. As a result of the change in accounting policy with respect to the treatment of borrowing costs (refer to note 5.3.1.2), at 31 December 2009 capitalised borrowing costs related to the construction of vessels amounted to EUR 7.9 million, with an interest rate of 4%.

5.35.3 Leased fixed assets The Group has no leased fixed assets that have to be included in property, plant and equipment.

114 5.35.4 Security Land and buildings includes EUR 8 million (2008: EUR 9 million) in the Netherlands, that serves as security for mortgage loans (refer to note 5.46).

5.36 Intangible assets (EUR x 1,000) 2009

Goodwill Software Other Total

Cost Balance at 1 January 2009 418,963 79,937 15,553 514,453 Acquisitions through business combinations 20,178 3,547 1,033 24,758 Adjustments prior period (221) – (1,543) (1,764) Purchase of intangible assets – 694 – 694 Internally developed intangible assets – 5,893 – 5,893 Effect of movements in foreign exchange rates 21,267 2,299 350 23,916

Balance at 31 December 2009 460,187 92,370 15,393 567,950

Amortisation and impairment losses Balance at 1 January 2009 442 57,690 4,191 62,323 Acquisitions through business combinations* – 207 120 327 Amortisation of intangible assets – 8,324 1,791 10,115 Effect of movements in foreign exchange rates – 2,325 170 2,495

Balance at 31 December 2009 442 68,546 6,272 75,260

Carrying amount At 1 January 2009 418,521 22,247 11,362 452,130

At 31 December 2009 459,745 23,824 9,121 492,690

* Including fair value adjustments.

Fugro Annual accounts 2009 115 (EUR x 1,000) 2008

Goodwill Software Other Total

Cost Balance at 1 January 2008 382,040 72,907 7,314 462,261 Acquisitions through business combinations 66,691 425 8,596 75,712 Adjustments prior period 9,339 – – 9,339 Purchase of intangible assets – 869 12 881 Internally developed intangible assets – 7,089 – 7,089 Effect of movements in foreign exchange rates (39,107) (1,353) (369) (40,829)

Balance at 31 December 2008 418,963 79,937 15,553 514,453

Amortisation and impairment losses Balance at 1 January 2008 442 51,050 3,182 54,674 Acquisitions through business combinations* – 341 – 341 Amortisation of intangible assets – 7,826 1,191 9,017 Effect of movements in foreign exchange rates – (1,527) (182) (1,709)

Balance at 31 December 2008 442 57,690 4,191 62,323

Carrying amount At 1 January 2008 381,598 21,857 4,132 407,587

At 31 December 2008 418,521 22,247 11,362 452,130

* Including fair value adjustments.

In 2009 significant amounts were spent on research which have been recognised in profit or loss, the same applies for 2008. Reference is made to paragraph 5.9.2 where it is explained that it is not feasible to properly determine the aggregate amount of research and development expenditure recognised as an expense in the period.

5.36.1 Impairment loss and subsequent reversal The Company has not incurred nor reversed any impairment losses.

5.37 Impairment tests for cash generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to cash generating units which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes and which is not higher than the Group’s operating segments as reported in note 5.25. The aggregate carrying amounts of goodwill are allocated to the following groups of cash generating units:

(EUR x 1,000) 2009 2008

Geotechnical 65,647 57,726 Survey 203,391 188,225 Geoscience 190,707 172,570

Total 459,745 418,521

116 The recoverable amounts of the cash generating units that carry goodwill are determined on calculations of value in use. Value in use was determined by discounting the expected future cash flows from the continuing use of the units. Unless indicated otherwise, value in use in 2009 was determined similarly as in 2008. The calculation of the value in use was based on the following key assumptions: – The period for the discounted cash flow calculations is in principle indefinite. However the Group has set the period at fifty years, subject to periodic evaluation, for the following reasons. About 75% of the Group’s activities relate to the oil and gas industry. The services are in principle of such a nature that our clients use us to help them to explore and extract hydrocarbon and mineral resources. Experts are without doubt that these resources will continue to be available to mankind for many decades and their reports indicate periods between fifty and hundred years. The Group recognises that harnessing alternative means of energy, like wind, nuclear and hydro electric energy will continue. These sources however have limited output and will be difficult to transport. – Cash flows in the first year of the forecast are based on the approved profit plan. The anticipated annual revenue growth for following years has been based on average growth levels ranging from 0 to 3.5%. – The pre-tax discount rate used to discount the pre-tax cash flows used for impairment testing purposes is determined through an iterative calculation method using the projected post-tax cash flows, expected tax rate for the respective cash generating unit and post-tax discount rate for the Group. The weighted average pre-tax discount rate for the Group is 10.8% (2008: 9.5%).

The key assumptions and the approach to determine their value are the growth rates that are based on analysis of the long-term market price trends in the oil and gas industry adjusted for actual experience. The carrying amounts of the units remain below the recoverable amounts and as such no impairment losses are accounted for. Future adverse changes in the assumptions could however reduce the recoverable amounts below the carrying amount. As at 31 December 2009 cumulative impairment losses of EUR 442 thousand (2008: EUR 442 thousand) have been recognised.

5.38 Investments in equity accounted investees The carrying amount of the equity accounted investees of the Group can be summarised as follows:

(EUR x 1,000) 2009 2008

Equity accounted investees 1,359 1,293

The Group’s share in realised profit in the above mentioned equity accounted investees amounted to EUR 422 thousand positive in 2009 (2008: EUR 102 thousand negative). In 2009 and 2008 the Group did not receive dividends from any of its investments in equity accounted investees or other investments.

5.39 Other investments The Group holds the following other investments:

(EUR x 1,000) 2009 2008

Other investments in equity instruments 1,095 1,109 Long-term loans 13,177 – Financial assets at fair value through profit or loss 5,129 – Available for sale financial assets 2,653 330 Other long-term receivables 1,487 1,514

23,541 2,953

Fugro Annual accounts 2009 117 The Group has the following other investments in equity instruments accounted for at cost:

Name of the company Owner- Profit/ (EUR x 1,000) Country ship Assets Liabilities Equity Revenue loss

La Coste & Romberg-Scintrex, Inc. Canada 11% 16,482 8,621 7,861 16,276 2,031

The Group’s other investments in equity instuments are not listed. A reliable fair value estimate can not be made.

The Group has provided a long-term convertible loan to Electro Magnetic GeoServices ASA. The conversion feature has been accounted for as financial asset at fair value through profit or loss.

The fair value of the available for sale financial assets is based with reference to quoted prices on the Australian Stock Exchange.

5.40 Deferred tax assets and liabilities 5.40.1 Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following items:

(EUR x 1,000) Assets Liabilities Net

2009 2008 2009 2008 2009 2008

Property, plant and equipment 7,828 4,720 (4,812) (3,995) 3,016 725 Intangible assets 261 234 (7,243) (6,055) (6,982) (5,821) Other investments 5,132 4,469 – – 5,132 4,469 Loans and borrowings – 1,244 (1,650) (31) (1,650) 1,213 Employee benefits 20,006 14,495 – – 20,006 14,495 Provisions 4,290 8,454 (1,698) (55) 2,592 8,399 Tax value of recognised loss carry-forwards 701 1,215 – – 701 1,215 Exchange differences 425 640 – (462) 425 178 Other items 1,785 1,329 (6,472) (888) (4,687) 441

Deferred tax assets/(liabilities) 40,428 36,800 (21,875) (11,486) 18,553 25,314 Set off of tax components (14,751) (10,511) 14,751 10,511 – –

Net deferred tax asset/(liability) 25,677 26,289 (7,124) (975) 18,553 25,314

The recognised deferred tax assets are dependent on future taxable profits in excess of profits arising from the reversal of existing taxable temporary differences.

118 Movement in temporary differences during the year (EUR x 1,000) 2009

Recog- nised in Recog- other nised in compre- Balance Acqui­si- profit or hensive Balance 01-01-09 tions loss income 31-12-09

Property, plant and equipment 725 (232) 2,523 – 3,016 Intangible assets (5,821) (362) (799) – (6,982) Other investments – – 663 – 663 Loans and borrowings 1,213 – 594 (3,457) (1,650) Employee benefits 14,495 (273) 1,740 4,044 20,006 Provisions 12,868 – (5,807) – 7,061 Tax value of recognised loss carry-forward 1,215 – (514) – 701 Exchange differences 178 – (1,755) 2,002 425 Other items 441 (311) (4,817) – (4,687)

25,314 (1,178) (8,172) 2,589 18,553

(EUR x 1,000) 2008

Recog- nised in Recog- other nised in compre- Balance Acqui­si- profit or hensive Balance 01-01-08 tions loss income 31-12-08

Property, plant and equipment 5,916 21 (5,212) – 725 Intangible assets (3,014) – (2,807) – (5,821) Loans and borrowings (772) – 597 1,388 1,213 Employee benefits 8,353 47 (2,955) 9,050 14,495 Provisions 7,684 3 5,181 – 12,868 Tax value of recognised loss carry-forward 551 – 664 – 1,215 Exchange differences (1,020) – 2,985 (1,787) 178 Other items (147) (19) 607 – 441

17,551 52 (940) 8,651 25,314

Fugro Annual accounts 2009 119 5.40.2 Unrecognised deferred tax assets and liabilities Deferred tax have not been recognised in respect of the following items:

Unrecognised deferred tax assets (EUR x 1,000) 2009 2008

Deductible temporary differences 1,624 1,650 Tax losses 16,860 9,907 Capital allowances 3,227 3,310

Total 21,711 14,867

Unrecognised deferred tax assets relate to tax unities previously suffering losses for which it is currently not probable that sufficient fiscal results will become available in the future to offset these losses, taking into account fiscal restrictions on the utilisation of loss compensation.

Unrecognised tax assets changed over the period as follows:

Unrecognised deferred tax assets (EUR x 1,000) 2009 2008

As of 1 January 14,867 24,738 Movements during the period: Additional losses 8,748 922 Utilisation (439) (4,634) Recognition of previously unrecognised temporary differences (773) – Recognition of previously unrecognised tax losses (1,208) (700) Effect of change in tax rates (56) (739) Exchange rate differences 1,139 (3,055) Change from reassessment (567) (4,787) Resulting from acquisitions – 3,122

As of 31 December 21,711 14,867

Reassessment of tax compensation opportunities under applicable tax regulations has resulted in a decrease of unrecognised deferred tax assets of EUR 0.6 million (2008: EUR 4.8 million decrease). Of the total recognised and unrecognised deferred tax assets in respect of tax losses carried forward an amount of EUR 797 thousand expires in periods varying from two to five years. An amount of EUR 1,155 thousand expires between five and ten years and an amount of EUR 15,609 thousand can be offset indefinitely. The deductible temporary differences and capital allowances do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items, because it is not probable that future taxable profit will be available against which the Group can utilise these benefits. Based on forecasted results per tax jurisdiction, management considered it probable that sufficient future taxable profit will be generated to utilise deferred tax assets depending on taxable profits in excess of the profits arising from the reversal of existing temporary differences.

Unrecognised deferred tax liabilities At 31 December 2009 no deferred tax liabilities relating to an investment in a subsidiary have been recognised (2008: nil), because the Group controls whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable future.

120 In some of the countries where the Group operates, local tax laws provide that gains on disposal of certain assets are tax exempt, provided that the gains are not distributed. The company does not intend to distribute such gains, therefore no tax liabilities are recognised in this respect.

5.41 Inventories (EUR x 1,000) 2009 2008

Seismic data libraries 68,511 27,208 Other inventories 12,123 12,525

80,634 39,733

Seismic data libraries Seismic data libraries are stated at net realisable value. During 2009 EUR 63,987 thousand (2008: EUR 55,338 thousand) of seismic data libraries were recorded in third party costs.

Other inventories During 2009 EUR 19,936 thousand (2008: EUR 19,705 thousand) of other inventories were recognised as an expense and EUR 136 thousand (2008: EUR 119 thousand) was written down. The write down is included in third party costs.

5.42 Trade and other receivables (EUR x 1,000) 2009 2008

Unbilled revenue on completed projects 154,426 132,383 Trade receivables 328,403 421,759 Non-trade receivables 86,924 63,871 Work in progress 2,257 1,220 Trade receivables due from equity accounted investees – 136

572,010 619,369

Unbilled revenue on completed projects include aggregate costs and recognised profits, net of recognised losses for all contracts in progress for which this amount exceeds progress billings. At 31 December 2009 trade receivables include retentions of EUR 7.3 million (2008: EUR 4.6 million) relating to completed projects. Trade receivables are shown net of impairment losses amounting to EUR 41.9 million (2008: EUR 51.7 million) arising from identified doubtful receivables from customers. Trade receivables were impaired taking into account the financial position of the debtors, the days outstanding and expected outcome of negotiations and legal proceedings against debtors. Unbilled revenue on completed projects is shown net of impairment losses amounting to EUR 5.0 million (2008: EUR 5.0 million). For detailed information on the credit risk of trade receivables reference is made to note 5.51.

5.43 Cash and cash equivalents (EUR x 1,000) 2009 2008

Cash and cash equivalents 107,795 113,286 Bank overdraft (167,556) (194,580)

Cash and cash equivalents in the consolidated statement of cash flows (59,761) (81,294)

At 31 December 2009 and 31 December 2008 all cash and cash equivalents are freely available to the Group.

Fugro Annual accounts 2009 121 5.44 Total equity 5.44.1 Share capital (In thousands of shares) Ordinary shares

2009 2008

On issue and fully paid at 1 January 76,608 70,421 Convertible converted into ordinary shares – 5,158 Stock dividend 2008 respectively 2007 2,165 1,029 Repurchased for option programme at year-end (1,219) (1,470)

On issue and fully paid at 31 December – entitled to dividend 77,554 75,138

At 31 December 2009 the authorised share capital comprised 320 million ordinary shares (2008: 320 million). As at 31 December 2009 and 2008 no preference shares have been issued. The shares have a par value of EUR 0.05. In 2009 certificates of shares have been issued by Fugro Trust Office (‘Stichting Administratiekantoor Fugro’) for 2,164,520 shares (2008: 6,186,515). The holders of ordinary shares are entitled to receive dividends as approved by the Annual General Meeting of Shareholders from time to time and are entitled to one vote per share at meetings of the Company. The holders of certificates of shares are entitled to the same dividend but are not entitled to voting rights. As per 31 December 2009 the Board of Management proposes a dividend to be paid out of EUR 1.50 (2008: EUR 1.50) per (certificate of) share or in the form of (certificates of) shares. This dividend proposal is currently part of unappropriated result. The Group has not issued preference shares.

5.44.2 Share premium The share premium can be considered as paid in capital.

5.44.3 Translation reserve The Translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

5.44.4 Hedging reserve The Hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

5.44.5 Reserve for own shares The Company has, in view of its option programme repurchased 550,000 (certificates of) shares during the year under review with an average share price of EUR 22.49 (2008: 1,581,000 certificates with an average share price of EUR 47.92). Further 800,920 (certificates of) shares were sold with an average share price of EUR 35.84 following the exercise by the option holders (2008: 654,020 (certificates of) shares at EUR 42.13). As per the end of the year under review the Company holds 1,218,776 (certificates of) shares (2008: 1,469,696). The number of (certificates of) shares held by the Company at the end of the year under review amounts to 1.5% of the issued and paid up capital (2008: 1.9%).

5.44.6 Unappropriated result After the reporting date the following dividends were proposed by the Board of Management. There are no corporate income tax consequences related to this proposal.

122 (EUR x 1,000) 2009 2008

EUR 1.50 per qualifying (depositary receipt for a) share (2008: EUR 1.50) 116,331 112,707

116,331 112,707

5.45 Earnings per share The basic earnings per share for 2009 amounts to EUR 3.46 (2008: EUR 3.88); the diluted earnings per share amount to EUR 3.42 (2008: EUR 3.73). The calculation of basic earnings per share at 31 December 2009 was based on the profit attributable to owners of the Company of EUR 263,410 thousand (2008: EUR 283,412 thousand) and a weighted average number of shares outstanding during the year ended 31 December 2009 of 76,210 thousand (2008: 73,048 thousand), calculated as follows:

5.45.1 Basic earnings per share Profit attributable to owners of the Company (EUR x 1,000) 2009 2008

Profit for the period 273,065 289,456 Non-controlling interest (9,655) (6,044)

Profit attributable to owners of the Company 263,410 283,412

Weighted average number of ordinary shares (In thousands of shares) 2009 2008

On issue and fully paid at 1 January 75,138 69,879 Effect of own shares held (427) (1,153) Effect of shares issued due to exercised option rights 227 291 Effect of shares issued due to optional dividend 1,272 604 Effect of conversion convertible loan – 3,427

Weighted average number of ordinary shares at 31 December 76,210 73,048

5.45.2 Diluted earnings per share The calculation of diluted earnings per share at 31 December 2009 was based on diluted profit attributable to owners of the Company of EUR 263,410 thousand (2008: EUR 284,601 thousand) and a diluted weighted average number of ordinary shares outstanding during the year ended 31 December 2009 of 77,002 thousand (2008: 76,401 thousand), calculated as follows:

Net profit attributable to owners of the Company (diluted) (EUR x 1,000) 2009 2008

Profit attributable to owners of the Company 263,410 283,412 After-tax effect of interest on convertible notes – 1,189

Profit attributable to owners of the Company (diluted) 263,410 284,601

Fugro Annual accounts 2009 123 Weighted average number of ordinary shares (diluted) (In thousands of shares) 2009 2008

Weighted average number of ordinary shares at 31 December 76,210 73,048 Effect of conversion of convertible notes outstanding – 1,731 Effect of share options on issue 792 1,622

Weighted average number of ordinary shares (diluted) at 31 December 77,002 76,401

5.46 Loans and borrowings This note provides information about the contractual terms of the Group’s loans and borrowings which are measured at amortised cost. For more information about the Group’s exposure to currency risk and interest rate risk, refer to note 5.53 and 5.54.

Non-current liabilities (EUR x 1,000) 2009 2008

Bank loans 343,889 290,000

Private Placement loans in USD 82,376 84,718 Private Placement loan in EUR 20,000 20,000 Mortgage loans 6,234 7,260 Other loans and long-term borrowings 14,666 19,891

Subtotal 467,165 421,869

Less: current portion of loans and borrowings 25,826 26,485

441,339 395,384

Terms and debt repayment schedule (EUR x 1,000) 2009 2008

Nominal interest Year of Face Carrying Face Carrying Currency rate maturity value value value value

EURIBOR Bank loans EUR +180 bps 2010-2013 345,000 343,889 290,000 290,000 Private Placement loans: 44 million USD bonds USD 6.85% 2012 30,360 30,219 31,240 31,064 39 million USD bonds USD 6.95% 2014 26,910 26,769 27,690 27,533 37 million USD bonds USD 7.10% 2017 25,530 25,388 26,270 26,121 20 million Eurobonds EUR 6.45% 2012 20,000 20,000 20,000 20,000 Mortgage and other loans and long-term borrowings Variable 4.22% 2010-2012 20,900 20,900 27,151 27,151

468,700 467,165 422,351 421,869

The mortgage loans are secured over land and buildings with a carrying amount of EUR 8 million (2008: EUR 9 million).

124 5.46.1 Credit facilities In 2005 a revolving credit facility was agreed with ABN AMRO Bank N.V. and Rabobank of EUR 200 million for a five years term. The interest rate was Euribor plus 30 base points. Per 3 November 2009 the facility has been settled.

In 2008 agreement was reached with Rabobank and ING Groep N.V. Both offer a revolving facility of EUR 100 million. The facilities are for respectively five and two years. Per 3 November 2009 the facility of ING Groep N.V. has been extended until 1 April 2012. The Rabobank facility is repaid in quarterly installments of EUR 5 million.

Per 3 November 2009 revolving credit facilities were agreed with ABN AMRO Bank N.V. (EUR 100 million), Rabobank (EUR 100 million) en BNP Paribas (EUR 50 million) maturing 1 April 2012.

The average interest rate of the new and renewed facilities per 3 November 2009 is Euribor plus 180 base points. At 31 December 2009 a total amount of EUR 345 million of the credit facilities was in use.

5.46.2 Private Placement loans In May 2002 long-term loans were concluded with twenty American and two British institutional investors. As per 8 May 2007 the Group terminated a Cross Currency Swap (foreign exchange contract related to the US Dollar exposure of the loans). The cumulative exchange differences as per termination date have been added to equity (Hedging reserve) and are being charged to profit or loss account during the remaining term of the loan. This resulted during 2009 in a cost of EUR 1,034 thousand (2008: EUR 1,032 thousand). At reporting date the loans are valued at the closing rate. The currency exchange difference on the loans between the initial exchange rate and the exchange rate at the reporting date is accounted for in the Translation reserve. For the year under review the currency exchange differences on loans in US dollars amount to EUR 2,400 positive (2008: EUR 3,600 thousand negative).

5.46.3 Covenant requirements Both the credit facilities as well as the Private Placement loans contain covenant requirements which can be summarised as follows: – Equity > EUR 200 million (only applicable to Private Placement loans) – EBITDA/Interest > 2.5 – Debt/EBITDA < 3.0 – Solvency > 30% (only applicable to credit facilities agreed per 3 November 2009) – Consolidated Financial Indebtedness of the Subsidiaries (only applicable to Private Placement loans) < 15% of the consolidated balance sheet total. At the twelve month rolling forward measurement dates in 2009 and 2008, the Company complied with the above conditions.

5.46.4 Mortgage and other loans and long-term borrowings The average interest rate on mortgage loans and other loans and long-term borrowings over one year amounts to 4.2% (2008: 4.2%).

5.46.5 Change of control provisions A change of control of Fugro N.V. could lead to early repayment of the credit facilities (5.46.1) and Private Placement loans (5.46.2).

Fugro Annual accounts 2009 125 5.47 Employee benefits (EUR x 1,000) 2009 2008

Present value of funded obligations 244,362 190,269 Fair value of plan assets (179,643) (143,757)

Recognised net liability for defined benefit obligations 64,719 46,512 Liability for long service leave 7,863 5,976

Total employee benefits 72,582 52,488

The Group makes contributions to a number of pension plans, both defined benefit plans as well as defined contribution plans, that provide pension benefits for employees upon retirement in a number of countries. The most important plans relate to plans in the Netherlands, United Kingdom, Norway and the United States; details of which are as follows: – In the Netherlands the Group provides for a pension plan based on average salary. This plan qualifies as a defined benefit scheme. The pension commitments from this scheme are fully insured on the basis of a guarantee contract. The scheme includes a (conditional) indexation of pension benefits as far as the return on the separated investments surpasses the actuarial required interest. – In the United Kingdom the Group operates two defined benefit pension schemes considering either a guaranteed minimum pension or a maximum lump sum entitlement. The pension schemes have been closed in previous years for new participants, but include the on-going obligations to their members (both former and present employees). The pension scheme assets are held in separate Trustee-administered funds to meet long-term pension liabilities to former and present employees. The Trustees are required to act in the best interest of the scheme’s participants and the appointment of trustees is determined by the scheme’s trust documentation. – In Norway a defined benefit pension plan exists that, combined with the available State pension plan, leads to a pension at the age of 67 years based on a defined maximum. The pension rights have been secured in an external pension insurance. – In the United States of America the Group operates a 401K plan for its employees. The Group contributes towards the deposits of its employees in accordance with agreed rules and taking into account the regulations of the IRS, the US tax authority. This plan qualifies as a defined contribution plan.

Liability for defined benefit obligations Plan assets consist of the following: (EUR x 1,000) 2009 2008

Equity securities 72,489 55,198 Government bonds 84,909 74,985 Corporate bonds 8,500 – Real estate 4,001 3,341 Cash 9,744 10,233

179,643 143,757

126 Movements in the liability for funded benefit obligations (EUR x 1,000) 2009 2008

Defined benefit obligations at 1 January 190,269 209,738 Benefits paid by the plan (2,854) (1,492) Current service costs and interest (see below) 17,826 16,517 Actuarial gains and losses recognised in other comprehensive income 29,096 (2,870) Exchange rate differences 10,025 (31,624)

Defined benefit obligations at 31 December 244,362 190,269

Movement in plan assets (EUR x 1,000) 2009 2008

Fair value of plan assets at 1 January 143,757 185,917 Contributions paid into the plan 8,778 9,273 Benefits paid by the plan (2,854) (1,492) Expected return on plan assets 8,703 10,872 Actuarial gains and losses recognised in other comprehensive income 14,603 (35,150) Exchange rate differences 6,656 (25,663)

Fair value of plan assets at 31 December 179,643 143,757

Expenses recognised in profit or loss (EUR x 1,000) 2009 2008

Current service costs 6,237 5,132 Interest on obligation 11,589 11,385

17,826 16,517 Expected return on plan assets (8,703) (10,872)

9,123 5,645

The expenses are recognised in the following line items in the statement of comprehensive income: (EUR x 1,000) 2009 2008

Personnel expenses 9,123 5,645

Actual return on plan assets (EUR x 1,000) 2009 2008

Actual return on plan assets 23,306 (24,278)

Fugro Annual accounts 2009 127 Actuarial gains and losses recognised directly in other comprehensive income (EUR x 1,000) 2009 2008

Cumulative amount at 1 January (17,826) 16,721 Recognised during the year (14,493) (32,279) Exchange variances (1,595) (2,268)

Cumulative amount at 31 December (33,914) (17,826)

Actuarial assumptions Principal actuarial assumptions at the reporting date (expressed as a range of weighted averages):

2009 2008

Discount rate at 31 December 4.4 – 5.7% 4.3 – 6.3% Expected return on plan assets at 31 December 5.0 – 7.45% 5.0 – 7.3% Future salary increases 2.0 – 4.25% 2.0 – 4.5% Medical cost trend rate n/a n/a Future pension increases 2.0 – 4.0% 2.0 – 3.1%

The financial effects of differences between the actuarial assumptions and actuals for the pension liability and plan assets are included in the actuarial gains and losses. Assumptions regarding future mortality are based on published statistics and mortality tables:

Netherlands: Generation table 2005-2050. For men and women, an age correction of (– 1: – 1) is applied. United Kingdom: PxA (00) rated + 2, by year of 1 birth with long coherent improvements. Norway: K2005

The calculation of the defined benefit obligation is sensitive to the mortality assumptions. As the actuarial estimates of mortality continue to be refined, an increase of one year in the lives is considered reasonably possible in the next financial year. The effect of this change would be an increase in the employee benefit liability by EUR 4.8 million. The overall expected long-term rate of return on assets is 6%. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

Historical information (EUR x 1,000) 2009 2008 2007 2006 2005

Present value of the defined obligation 244,362 190,269 209,738 216,474 208,115 Fair value of plan assets 179,643 143,757 185,917 183,207 165,618

Deficit in the plan (64,719) (46,512) (23,821) (33,267) (42,497)

Experience adjustments arising on plan liabilities 1,269 (1,982) (14,204) 1,932 2,996 Experience adjustments arising on plan assets 14,603 (35,150) (4,358) (813) 10,248

The estimated planned contributions 2010 amount to EUR 8.8 million (estimate 2009: EUR 9.2 million).

128 5.48 Provisions (EUR x 1,000) 2009 2008

Restruc- Proce- Restruc- Proce- turing dures Total turing dures Total

Balance at 1 January 137 13,018 13,155 373 15,905 16,278

Provisions made during the year – 1,050* 1,050 – 4,818* 4,818 Provisions used during the year (101) (461) (562) (236) – (236) Provisions reversed during the year – (7,403) (7,403) – (7,705) (7,705)

Balance at 31 December 36 6,204 6,240 137 13,018 13,155

Non-current 36 6,204 6,240 137 13,018 13,155

* Including accrued interest.

Procedures The Group is involved in several legal proceedings in various jurisdictions (including the USA) as a result of its normal business activities, either as plaintiffs or defendants in claims. The Board of Management ensures that these cases are vigorously defended. The Group has set up adequate provisions for those claims where management believes it is probable that a liability has been incurred and the amount is reasonably estimable. These provisions are reviewed periodically and adjusted if necessary. Considering the expected duration of the (legal court) proceedings, management does not expect the legal actions, for which a provision has been set-up, to be completed within the next year. The expected outflows of economic benefits have been discounted at a rate of 4.5%, and are based on managements best estimate. Final settlements can differ from this estimate, and could require revisions to the estimated provisions. In 2009, the Company settled a number of claims without incurring costs. Consequently part of the provision for procedures has been reversed.

5.49 Trade and other payables (EUR x 1,000) 2009 2008

Trade payables 74,249 98,322 Advance instalments to work in progress 32,527 16,276 Foreign exchange contracts – 1,482 Non-trade payables and accrued expenses 243,267 279,440

Balance at 31 December 350,043 395,520

5.50 Financial risk management 5.50.1 Overview The Company’s risk management policy includes the long-term sustainable management of its business activities and where possible, the mitigation of the associated business risks. Based on the nature and relative significance of the risks related to the Group’s wide diversity of markets, clients and regions and its broad portfolio of activities the risks have been quantified to the extent possible.

Fugro Annual accounts 2009 129 The Group has exposure to the following risks from its use of financial instruments: – credit risk – liquidity risk – market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital.

The Board of Management has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their role and obligations.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by internal audit. Both regular and ad hoc reviews of risk management controls and procedures are performed, the results of which are reported directly to the Board of Management and Executive Committee. A summary of important observations is reported to the Audit Committee.

5.50.2 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

Trade and other receivables The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer and countries in which the customers are located. As the Group operates to a large extent in the oil and gas industry a significant portion of trade and other receivables relates to clients from this industry.

Some of the Group’s orders are awarded on the basis of long-term preferred supplier agreements. In the course of a year the Company often carries out multiple projects for the same client. The projects carried out for any single client do not, however, account for more than 4% on an annual basis of the total revenue. Having a large number of clients and short project time spans mitigates the Company’s credit risk as the individual amounts receivable with the same client are limited.

New customers are analysed individually for creditworthiness before payment and delivery terms and conditions are offered. The Group’s review may include external ratings, where available, and in some cases bank references. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis or have to provide a bank guarantee.

The majority of the Group’s customers has done business with the Group for many years and significant losses have only occurred incidentally in prior years. However, as a result of the expected negative effects of the current worldwide economic crisis the credit risk has increased significantly. Customers that are known to have negative credit characteristics are individually monitored by the group controllers. Findings are reported on a bi-weekly basis to the Board of Management. If customers fail to pay timely the Group re-assesses the creditworthiness and stronger debt collection is started if deemed necessary. The Group publishes an internal list of customers that need extra attention before a contract is closed.

130 The Board of Management reviews frequently the effects of the crisis on the outstanding trade receivables. Local management is requested to take additional precaution in working with affected clients.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures for clients or countries, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics.

Guarantees In principle the Company does not provide parent company guarantees to its subsidiaries, unless significant commercial reasons exist. The Company has deposited declarations of joint and several liability for a number of subsidiaries at the Chambers of Commerce. The Company has deposited a list with the Chamber of Commerce, which includes all financial interests of the Group in subsidiaries as well as a reference to each subsidiary for which such a declaration of liability has been deposited. At 31 December 2009 and at 31 December 2008 no significant guarantees were outstanding.

5.50.3 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group monitors cash flow on a regular basis. Consolidated cash flow information including a six months projection is reported on a monthly basis to the Executive Committee, ensuring that the Group has sufficient cash on demand (or available lines of credit) to meet expected operational expenditures for the next half-year, including the servicing of financial obligations from lease commitments not included in the statement of financial position and investment programs in vessels. Cash flows exclude the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters and currently unpredictable further negative consequences resulting from the current worldwide economic crisis. The Group maintains the following lines of credit: – Revolving line of credit with ABN AMRO Bank N.V., ING Groep N.V. and Rabobank of each EUR 100 million maturing on 1 April 2012. The average interest rate is currently EURIBOR plus 180 base points. At 31 December 2009 (EUR 275 million) and 2008 (EUR 275 million) the facilities are almost fully drawn. – Revolving line of credit with BNP Paribas of EUR 50 million maturing on 1 April 2012. The average interest rate is currently EURIBOR plus 185 base points. The facility has not been used at year-end 2009. – Revolving lines of credit with Rabobank as of 31 December 2009 of EUR 100 million, maturing in May 2013. The Rabobank facility is fully drawn at 31 December 2009. The facility is being repaid in equal quarterly instalments. – A variety of unsecured overdraft facilities in various currencies totalling around EUR 425 million of which EUR 62.3 million has been drawn at 31 December 2009 (2008: around EUR 300 million with EUR 123.5 million drawn).

5.50.4 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Fugro Annual accounts 2009 131 Currency risk The global nature of the business of the Group exposes the operations and reported financial results and cash flows to the risks arising from fluctuations in exchange rates. The Group’s business is exposed to currency risk whenever it has revenues in a currency that is different from the currency in which it incurs the costs of generating those revenues. In the case that the revenues can be offset against the costs incurred in the same currency, the balance may be affected if the value of the currency in which the revenues and costs are generated varies relative to the Euro. This risk exposure primarily affects those operations of the Group that generate a portion of their revenue in foreign currencies and incur their costs primarily in Euros.

Cash inflows and outflows of the operating segments are offset if they are denominated in the same currency. This means that revenue generated in a particular currency balance out costs in the same currency, even if the revenues arise from a different transaction than that in which the costs are incurred. As a result, only the unmatched amounts are subject to currency risk.

To mitigate the impact of currency exchange rate fluctuations, the Group continually assesses the exposure to currency risks and if deemed necessary a portion of those risks is hedged by using derivative financial instruments. The principal derivative financial instruments used to cover foreign currency exposure are forward foreign currency exchange contracts. Given the current investment program in vessels and the fact that the majority of the investments is denominated in US dollar, the Group is currently not using derivative financial instruments as positive cash flow in US dollar from operations is offset to a large extent by these investments.

Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily Euro and US dollar. This substantially provides an economic hedge and no derivatives are entered into. The Group’s investment in its subsidiaries in the United States of America is partly hedged by means of the US dollar Private Placement loans, which mitigates the currency risk arising from the subsidiary’s net assets.

The hedge on the investment is fully effective. Consequently all exchange differences relating to this hedge have been accounted for in other comprehensive income.

Interest rate risk The Group’s liabilities bear both fixed and variable interests. The Group’s objective is to limit the effect of interest rate changes on the results by matching long term investment with long term (fixed interest) financing as much as possible. The Group continuously considers interest rate swaps to limit significant (short term) interest exposures.

5.50.5 Capital Management The Board of Management’s policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business; the Board of Management manages only equity as capital. The Board of Management monitors the geographic spread of shareholders. The Board strives for a dividend pay-out ratio of 35 to 55% of the net result. The Board also strives to maintain a healthy financial position with a target solvency between 30 and 35%.

The Board of Management seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Group’s target is to achieve a healthy return on shareholders’ equity; the return was 24.9% (2008: 35.9%). In comparison the weighted average interest expense on interest-bearing borrowings was 3.7% (2008: 4.1%).

132 From time to time Fugro N.V. purchases its own certificates of shares on the market. The certificates of shares are intended to cover the option rights granted by Fugro N.V. Purchase and sale decisions are made on a specific transaction basis by the Board of Management. Fugro N.V. does not have a defined share buy-back plan.

There were no changes to the Group’s approach to capital management during the year.

The Group is subject to the externally imposed capital requirements related to covenant requirements as set out in note 5.46.3. As per 31 December 2009 and 31 December 2008 the Group complied with all imposed external capital requirements.

5.51 Credit risk Exposure to credit risk (EUR x 1,000) Carrying amount

2009 2008

Other investments in equity instruments 1,095 1,109 Available for sale financial assets 2,653 330 Long-term loans 13,177 – Other long-term receivables 1,487 1,514 Unbilled revenue on completed projects 154,426 132,383 Trade receivables 328,403 421,759 Non-trade receivables 86,924 63,871 Trade receivables due from equity accounted investees – 136 Cash and cash equivalents 107,795 113,286

695,960 734,388

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of financial assets mentioned above. The Group holds collateral as security on the long-term loans.

The maximum exposure for trade receivables and unbilled revenue on completed contracts at the reporting date by geographic region was:

(EUR x 1,000) Carrying amount

2009 2008

Netherlands 44,512 47,686 Europe other 211,655 230,241 Africa 16,408 23,160 Middle East 55,763 68,438 Asia 45,634 43,024 Australia 33,956 47,783 Americas 74,901 93,946

482,829 554,278

Fugro Annual accounts 2009 133 The maximum exposure for trade receivables and unbilled revenue on completed contracts at the reporting date by type of customer was:

(EUR x 1,000) Carrying amount

2009 2008

Oil and gas 340,392 397,632 Infrastructure 99,217 90,517 Mining 14,480 18,570 Other 28,740 47,559

482,829 554,278

Impairment losses The ageing of trade receivables and unbilled revenue on completed contracts at the reporting date was: – As of 31 December 2009, trade receivables and unbilled revenue on completed projects of EUR 482,829 thousand (2008: EUR 554,278 thousand) were fully performing. – As of 31 December 2009, trade receivables of EUR 110,954 thousand (2008: EUR 147,570 thousand) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The average credit term for these trade receivables is 30 days. – As of 31 December 2009, trade receivables and unbilled revenue on completed projects of EUR 46,921 thousand (2008:EUR 56,709 thousand) were impaired and provided for.

The individually impaired receivables mainly relate to customers, which are in unexpectedly difficult economic situations. It was assessed that a portion of the receivables is expected to be recovered. The ageing of trade receivables and unbilled revenue on completed projects is as follows:

(EUR x 1,000) 2009 2008

Impair- Impair- Gross ment Gross ment

From 0 to 30 days 376,875 5,000 411,708 5,000 From 31 to 60 days 62,566 1,546 90,863 3,287 From 61 to 90 days 25,862 6,543 46,222 7,892 Over 90 days 56,609 31,376 55,041 35,107 Retentions and special items 7,838 2,456 7,153 5,423

529,750 46,921 610,987 56,709

134 The movement in the allowance for impairment in respect of trade receivables and unbilled revenue on completed contracts during the year was as follows:

(EUR x 1,000) 2009 2008

Balance at 1 January 56,709 31,610 Impairment loss recognised 2,344 31,337 Impairment loss reversed (11,072) (3,577) Trade receivables written off (1,353) (1,168) Acquired through business combinations – 79 Exchange differences 293 (1,572)

Balance at 31 December 46,921 56,709

The allowance accounts in respect of trade receivables and unbilled revenue on completed contracts are used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amount considered irrecoverable is written off directly against the allowance.

No impairments related to other financial assets than trade receivables and unbilled revenue on completed contracts is recognised. In general, the Group considers credit risk on other receivables and cash and cash equivalents to be limited. Cash and cash equivalents are held with large well known banks with adequate credit ratings only.

In 2008 an allowance for impairment in respect of trade receivables and unbilled revenue on completed contracts of EUR 20 million was recognised, related to the wordwide economic crisis. In 2009 approximately EUR 2 million of this provision was used.

5.52 Liquidity risk The following are the contractual cash flows (excluding interest payments) of financial liabilities:

(EUR x 1,000) 2009

Contrac- Carrying tual cash 6 months 6 – 12 1 – 2 2 – 5 More than amount flows or less months years years 5 years

Bank loans 343,889 345,000 10,000 10,000 39,630 284,259 – Private Placement loans: 44 million USD bonds 30,219 30,360 – – – 30,219 – 39 million USD bonds 26,769 26,910 – – – 26,769 – 37 million USD bonds 25,388 25,530 – – – – 25,388 20 million Eurobonds 20,000 20,000 – – – 20,000 – Mortgage and other loans and long-term borrowings 20,900 20,900 2,484 3,342 7,646 7,428 – Trade and other payables 350,043 350,043 350,043 – – – – Bank overdraft 167,556 167,556 167,556 – – – –

984,764 986,299 530,083 13,342 47,276 368,675 25,388

Fugro Annual accounts 2009 135 It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or for significantly different amounts.

(EUR x 1,000) 2008

Contrac- Carrying tual cash 6 months 6 – 12 1 – 2 2 – 5 More than amount flows or less months years years 5 years

Bank loans 290,000 290,000 10,000 10,000 240,000 30,000 – Private Placement loans: 44 million USD bonds 31,064 31,240 – – – 31,064 – 39 million USD bonds 27,533 27,690 – – – – 27,533 37 million USD bonds 26,121 26,270 – – – – 26,121 20 million Eurobonds 20,000 20,000 – – – 20,000 – Mortgage and other loans and long-term borrowings 27,151 27,151 – 6,485 14,858 5,808 – Trade and other payables 395,520 395,520 395,520 – – – – Bank overdraft 194,580 194,580 194,580 – – – –

1,011,969 1,012,451 600,100 16,485 254,858 86,872 53,654

5.53 Currency risk The following significant exchange rates applied during the year:

Reporting Average date mid- (In EUR) rate spot rate

USD 0.72 0.69 GBP 1.13 1.13 NOK 0.115 0.121 CHF 0.66 0.67

Sensitivity analysis A 10 percent strengthening of the Euro against the following currencies at 31 December would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2008.

136 Profit or Effect in Euro thousands Equity (loss)

31 December 2009 USD (6,030) (9,850) GBP (12,877) (3,161) NOK (14,877) (1,244) CHF (34,073) (4,520)

31 December 2008 USD (8,532) (8,386) GBP (26,013) (4,130) NOK (15,811) (8,784) CHF (32,126) (3,389)

A 10 percent weakening of the Euro against the above currencies at 31 December would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant.

5.54 Interest rate risk At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

(EUR x 1,000) Carrying amount

2009 2008

Fixed rate instruments Financial assets 13,177 – Financial liabilities (123,276) (131,869)

Variable rate instruments Financial liabilities (403,650) (371,294)

(513,749) (503,163)

Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value through profit or loss hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

At 31 December 2009 it is estimated that a general increase of 100 basis points in interest rates would decrease the Group’s profit before income tax by approximately EUR 4.0 million (2008: negative impact of EUR 3.7 million).

Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. This analysis is performed on the same basis for 2008.

Fugro Annual accounts 2009 137 (EUR x 1,000) Profit or loss Equity

100 bp 100 bp 100 bp 100 bp increase decrease increase decrease

31 December 2009 Variable rate instruments (4,037) 4,037 – –

Cash flow sensitivity (net) (4,037) 4,037 – –

31 December 2008 Variable rate instruments (3,713) 3,713 – –

Cash flow sensitivity (net) (3,713) 3,713 – –

5.55 Fair values The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

(EUR x 1,000) 2009 2008

Carrying Carrying amount Fair value amount Fair value

Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss 5,129 5,129 – –

Loans and receivables Trade receivables, unbilled revenue on completed projects and other receivables 572,010 572,010 619,369 619,369 Cash and cash equivalents 107,795 107,795 113,286 113,286 Long-term loans 13,177 13,177 – – Other long-term receivables 1,487 1,487 1,514 1,514

Available for sale financial assets Other investments in equity instruments* 1,095 1,095 1,109 1,109 Available for sale financial assets 2,653 2,653 330 330

Financial liabilities measured at amortised cost Bank loans (343,889) (343,889) (290,000) (290,000) Mortgage and other loans and long-term borrowings (20,900) (20,900) (27,151) (27,151) Private Placement loans in USD (82,376) (83,212) (84,718) (107,565) Private Placement loans in EUR (20,000) (19,817) (20,000) (22,700) Bank overdraft (167,556) (167,556) (194,580) (194,580) Trade and other payables (350,043) (350,043) (395,520) (395,520)

Total (281,418) (282,071) (276,361) (301,908)

Unrecognised gains/(losses) (653) (25,547)

* The other investments in equity instruments do not have a quoted market price in an active market. The fair value cannot be reliably measured by the Group.

138 Interest rates used for determining fair value The Group uses the government yield curve as per the reporting date plus an adequate constant credit spread to discount financial instruments. The interest rates used are as follows:

Derivatives 2009 2008

Loans and borrowings 2.0 – 7.1% 2.0 – 7.1% Leases n/a n/a Receivables n/a n/a

Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: – Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. – Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). – Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total EUR EUR EUR EUR 31 December 2009 1,000 1,000 1,000 1,000

Available-for-sale financial assets 2,653 – – 2,653 Financial assets at fair value through profit or loss – 5,129 – 5,129

Total 2,653 5,129 – 7,782

Level 1 Level 2 Level 3 Total EUR EUR EUR EUR 31 december 2008 1,000 1,000 1,000 1,000

Available-for-sale financial assets 330 – – 330

Derivative financial liabilities 1,482 – – 1,482

There have been no transfers from Level 2 to Level 1 in 2009 (2008: no transfers in either direction).

Fugro Annual accounts 2009 139 5.56 Commitments not included in the statement of financial position 5.56.1 Operating leases as lessee Non-cancellable operating lease rentals are payable as follows:

(EUR x 1,000) 2009 2008

Less than one year 128,959 112,443 Between one and five years 256,356 276,237 More than five years 77,463 61,402

462,778 450,082

The Group leases a number of offices and warehouse/laboratory facilities and vessels under operating leases. The leases typically run for an initial period of between three and ten years, with in most cases an option to renew the lease after that date. Lease payments are adjusted annually to reflect market rentals. None of the leases include contingent rentals.

The Group does, in principle, not act as a lessor.

5.56.2 Capital commitments At 31 December 2009 the Group has contractual obligations to purchase property, plant and equipment for EUR 289.1 million (2008: EUR 402.6 million).

5.56.3 Contingencies Some Group companies are, as a result of their normal business activities, involved either as plaintiffs or defendants in claims. Based on information presently available and management’s best estimate the financial position of the Group is not likely to be significantly influenced by any of these matters. Should the actual outcome differ from the assumptions and estimates, the financial position of the Group would be impacted. Fugro N.V. and the Dutch operating companies form a fiscal unit for corporate tax. Each of the operating companies is severally liable for tax to be paid by all companies that belong to the fiscal unit.

5.57 Subsequent events There are no subsequent events to report.

140 5.58 Related parties 5.58.1 Identity of related parties The Group has a related party relationship with its subsidiaries, its equity accounted investees and its Directors and Executive Committee.

5.58.2 Transactions with Directors (Board of Management) Directors of the Company control 0.5% of the voting shares of the Company. Directors also participate in the Group’s share option programme (refer note 5.30.1).

The remuneration of the Board of Management for 2009 and 2008 is as follows:

(in EUR) K.S. Wester A. Jonkman P. van Riel A. Steenbakker J. Rüegg*

2009 2008 2009 2008 2009 2008 2009 2008 2009

Fixed salary 563,680 563,680 312,000 312,000 312,000 312,000 312,000 312,000 91,000 Bonus with respect to the previous year 516,707 361,334 286,000 200,000 286,000 166,667 286,000 166,667 -- Pension costs (including disability insurance) 367,420 366,521 265,342 266,521 265,342 264,051 265,342 266,521 8,371

1,447,807 1,291,535 863,342 778,521 863,342 742,718 863,342 745,188 99,371

Value of options granted 1,092,600 668,650 728,400 450,950 728,400 419,850 728,400 419,850 637,350

Total 2,540,407 1,960,185 1,591,742 1,229,471 1,591,742 1,162,568 1,591,742 1,165,038 736,721

* J. Rüegg was appointed to the Board of Management as per 16 September 2009. The remuneration is disclosed as of this date.

The fringe benefits for the Board of Management are commensurate with the position held. The annual bonus is based upon the remuneration policy as adopted by the Annual General Meeting of Shareholders on 14 May 2008.

There are no guarantees or obligations towards or on behalf of the Board of Management. Hereunder the information of the options granted to members of the Board of Management is given on an individual basis.

Fugro Annual accounts 2009 141 Number of Board of Management Number of option rights In EUR months

Share price at Number at Granted Exercised Forfeited Number at Exercise exercise Expiring Year 01-01-09 in 2009 in 2009 in 2009 31-12-09 price day date Bonus1)

K.S. Wester 2003 108,000 108,000 – 10.20 33.43 2) 31-12-2009 4 2004 108,000 108,000 15.35 31-12-2010 6 2005 113,000 113,000 27.13 31-12-2011 7 2006 125,000 125,000 36.20 31-12-2012 8 2007 125,000 125,000 52.80 31-12-2013 8 2008 107,500 107,500 20.485 31-12-2014 11 2009 90,000 90,000 40,26 31-12-2015 10

Total 686,500 90,000 108,000 – 668,500

A. Jonkman 2003 50,400 50,400 – 10.20 32.55 2) 31-12-2009 – 2004 80,000 80,000 15.35 31-12-2010 6 2005 85,000 85,000 27.13 31-12-2011 7 2006 85,000 85,000 36.20 31-12-2012 8 2007 85,000 85,000 52.80 31-12-2013 8 2008 72,500 72,500 20.485 31-12-2014 11 2009 60,000 60,000 40.26 31-12-2015 10

Total 457,900 60,000 50,400 – 467,500

P. van Riel 2004-2005 82,400 82,400 22.56 2) 31-12-2011 – 2006 75,000 75,000 36.20 31-12-2012 8 2007 75,000 75,000 52.80 31-12-2013 8 2008 67,500 67,500 20.485 31-12-2014 11 2009 60,000 60,000 40.26 31-12-2015 10

Total 299,900 60,000 – – 359,900

A. Steenbakker 2005 50,400 50,400 27.13 31-12-2011 – 2006 75,000 75,000 36.20 31-12-2012 8 2007 75,000 75,000 52.80 31-12-2013 8 2008 67,500 67,500 20.485 31-12-2014 11 2009 60,000 60,000 40.26 31-12-2015 10

Total 267,900 60,000 – – 327,900

J. Rüegg 2005-2008 150,200 150,200 34.94 2) 31-12-2014 – 2009 52,500 52,500 40.26 31-12-2015 10

Total 150,200 52,500 – – 202,700

Total 1,862,400 322,500 158,400 – 2,026,500

1) Bonus in the book year; paid in the next year. 2) Weighted average.

142 5.58.3 Executive Committee The Group considers the Executive Committee, including the Board of Management, as key management personnel. In addition to their salaries, the Group also provides non-cash benefits to the Executive Committee, and contributes to their post-employment plan. The members of the Executive Committee also participate in the Group’s share option programme. Key management personnel compensation comprised:

(in EUR) 2009 2008

Fixed salary 2,773,917 2,208,030 Bonus with respect to the previous year 2,300,412 1,318,255 Pension costs (including disability insurance) 1,538,463 1,280,960 Value of options granted 5,913,650 2,836,800

12,526,442 7,644,045

Mr. Meyer and Mr. Sommerville were appointed as members of the Excecutive Committee as per 1 January 2009.

5.58.4 Supervisory Board The remuneration of the Supervisory Board is as follows:

(in EUR) 2009 2008

F.H. Schreve, Chairman 68,000 70,000 F.J.G.M. Cremers, Vice-Chairman 48,000 48,000 J.A. Colligan 46,000 47,000 P.J. Crawford 16,138 46,000 M. Helmes 29,862 – G-J. Kramer 46,000 46,000 Th. Smith 61,000 61,000

315,000 318,000

There are no options granted and no assets available to the members of the Supervisory Board. There are no loans outstanding to the members of the Supervisory Board and no guarantees given on behalf of members of the Supervisory Board.

Below is a summary of the number of options to acquire Fugro N.V. ordinary shares that are held by Mr. G-J. Kramer. These share options were granted to Mr. Kramer when he was a member (CEO) of the Board of Management of Fugro N.V. Number of option rights In EUR

Share price at Number at Exercised Forfeited Number at Exercise exercise Expiring Year 01-01-09 in 2009 in 2009 31-12-09 price day date

G-J. Kramer 2003 129,600 129,600 – 10.20 39.02 31-12-2009 2004 129,600 129,600 15.35 31-12-2010 2005 129,600 129,600 27.13 31-12-2011

Total 388,800 129,600 – 259,200

Fugro Annual accounts 2009 143 Per 31 December 2009 Mr. Kramer held (in person and via Woestduin Holding N.V.) 4,309,784 (certificates of) ordinary shares in Fugro N.V.

5.58.5 Other related party transactions 5.58.5.1 Joint venture The Group has not entered into any joint ventures.

5.59 Subsidiaries 5.59.1 Significant subsidiaries For an overview of (significant) subsidiaries we refer to chapter 6.

5.60 Estimates and management judgements Management discussed with the Audit Committee the development in and choice of critical accounting principles and estimates and the application of such principles and estimates.

Key sources of estimation uncertainty The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes: – Deferred tax; The assumptions used in recognition and measurement of deferred taxes are disclosed in note 5.40. – Impairments; Impairment analyses of goodwill are performed annually and whenever a triggering event has occurred to determine whether the carrying value exceeds the recoverable amount. These analyses are based on estimates of future cash flows. The accounting policies regarding impairments are included in note 5.15. Note 5.37 contains information about the key assumptions used to determine the recoverable amount of the various cash generating units. Note 5.41 contains information about the impairment of seismic data. The expected negative effect of the current worldwide economic crisis on credit risk is disclosed in notes 5.50.2 and 5.51. These notes contain information about the assumptions used relating to impairment of trade receivables, unbilled revenue on completed projects and other receivables. – Assets and liabilities from employee benefits; Actuarial assumptions are established to anticipate future events and are used in calculating pension and other post retirement benefit expenses and liabilities. These factors include assumptions with respect to interest rates, expected investment returns on plan assets, rates of future compensation increases, turnover rates and life expectancy. Note 5.47 contains information about the (actuarial) assumptions related to employee benefits. Actuarial gains and losses related to defined benefit plans are accounted for in other comprehensive income. – Other provisions, tax and other contingencies; Information on the assumptions used in estimating the effect of legal proceedings are included in note 5.48.

144 6 Subsidiaries and investments of Fugro N.V. accounted for using the equity method (including statutory seat and percentage of interest)

Unless stated otherwise, the direct or indirect interest of Fugro N.V. in the entities listed below is 100%. Insignificant, but consolidated, subsidiaries in terms of third party recompense for goods and services supplied and balance sheet totals have not been included. The subsidiaries listed below have been fully incorporated into the consolidated annual accounts of Fugro N.V., unless indicated otherwise. Companies in which the Group participates but that are not included in the Group’s consolidated annual accounts are indicated by a #.

The information as required by Articles 2:379 and 2:414 of the Netherlands Civil Code has been filed with the Commercial Registry in The Hague.

Company % Office, Country Company % Office, Country

Fugro LADS Corporation Pty Ltd. Mawson Lakes, Australia Fugro Aerial Mapping A/S Taastrup, Denmark

Fugro Airborne Surveys Pty Ltd. Perth, Australia Fugro M.I.S.R. 75.5% Caïro, Egypt

Fugro Geoteam Pty Ltd. Perth, Australia Fugro S.A.E. Caïro, Egypt

Fugro Holdings Australia Pty Ltd. Perth, Australia Fugro Geoid S.A.S. Jacou, France

Fugro-Jason Australia Pty Ltd. Perth, Australia Fugro France S.A.S. Nanterre, France

Fugro Multi Client Services Pty Ltd. Perth, Australia Fugro Geotechnique S.A. Nanterre, France

Fugro Seismic Imaging Pty Ltd. Perth, Australia Fugro Topnav S.A.S. Paris (Massy), France

Fugro Spatial Solutions Pty Ltd. Perth, Australia Fugro Consult GmbH Berlin, Germany

Fugro Survey Pty Ltd. Perth, Australia Fugro-OSAE GmbH Bremen, Germany

Fugro Subsea Services Australia Pty Ltd. Perth, Australia Fugro Weinhold Engineering GmbH Erkelenz-Holzweiler, Germany

OmniSTAR Pty Ltd. Perth, Australia Fugro-MAPS GmbH Munich, Germany

Fugro PMS Pty Ltd. Sydney, Australia Fugro HGN GmbH Nordhausen, Germany

Fugro Austria GmbH Bruck an der Mur, Austria Fugro Certification Services Ltd. Fo Tan, Hong Kong

Azeri-Fugro # 40% Baku City, Azerbaijan Fugro Technical Services Ltd. Fo Tan, Hong Kong

Fugro Survey GmbH (Caspian branch office) Baku City, Azerbaijan Geotechnical Instruments (Hong Kong) Ltd. Fo Tan, Hong Kong

Fugro Engineers S.A. Brussels, Belgium Fugro Geotechnical Services Ltd. Fo Tan, Hong Kong

Fugro In Situ Geotecnia Ltda. Portao, Brazil Fugro Shanghai (Hong Kong) Ltd. Wanchai, Hong Kong

Fugro Brasil Ltda. Rio de Janeiro, Brazil Fugro (Hong Kong) Ltd. Wanchai, Hong Kong

Fugro Geosolutions Brasil Serviços Ltda. Rio de Janeiro, Brazil Fugro Geosciences International Ltd. Wanchai, Hong Kong

Geomag S/A Prospeccoes Aerogeofisicas 20% Rio de Janeiro, Brazil Fugro Holdings (Hong Kong) Ltd. Wanchai, Hong Kong

LASA Engenhariae Prospeccoes S.A. 20% Rio de Janeiro, Brazil Fugro Geospatial Services (Hong Kong) Ltd. Wanchai, Hong Kong

Fugro Sdn Bhd. (Brunei) Bandar Seri Begawan, Brunei Darussalam Fugro Marine Survey International Ltd. Wanchai, Hong Kong

Fugro Survey (Brunei) Sdn Bhd. Kuala Belait, Brunei Darussalam Fugro SEA Ltd. Wanchai, Hong Kong

Fugro SESL Geomatics Ltd. Calgary, Alberta, Canada Fugro Subsea Services Ltd. Wanchai, Hong Kong

Fugro Data Solutions Canada, Inc. Calgary, Alberta, Canada Fugro Survey International Ltd. Wanchai, Hong Kong

Fugro Airborne Surveys, Corp. Missisauga, Ontario, Canada Fugro Survey Ltd. Wanchai, Hong Kong

Fugro (Canada), Inc. New Brunswick, Canada Fugro Survey Management Ltd. Wanchai, Hong Kong

Fugro Airborne Surveys, Corp. Ottawa, Ontario, Canada MateriaLab Consultants Ltd. Tuen Mun, Hong Kong

Fugro Roadware, Inc. Paris, Ontario, Canada Fugro NexTerra Geophysics Pvt Ltd. Kolkata, India

Fugro Jacques GeoSurveys, Inc. 70% St. John’s, Newfoundland, Canada Fugro Geoscience India Pvt. Ltd. Navi Mumbai, India

Fugro Geoscience (Beijing) Ltd. Beijing, China Fugro Geotech (Pvt) Ltd. Navi Mumbai, India

Fugro Technical Services (Guangzhou) Ltd. Guangzhou, China Fugro Survey (India) Pvt Ltd. 90% Navi Mumbai, India

Fugro Pacifica Qinhuangdao Co. Ltd. 90% Qinhuangdao, China P.T. Fugro Indonesia Jakarta Selatan, Indonesia

Fugro Geotechnique Co. Ltd. 60% Shanghai, China Fugro Oceansismica S.p.A. Rome, Italy

China Offshore Fugro GeoSolutions Fugro Japan Co., Ltd. Tokyo, Japan

(Shenzhen) Co. Ltd. 50% Shekou, Shenzhen, China Fugro Kazakhstan LLC Atyrau, Kazakhstan Republic

Fugro Comprehensive Geotechnical Fugro KazProject LLP Atyrau, Kazakhstan Republic

Investigation (Zhejiang) Co. Ltd. Zhejiang, China Fugro-MAPS S.a.r.l. Beirut, Lebanon

Fugro Annual accounts 2009 145 Company % Office, Country Company % Office, Country

Fugro Geoscience GmbH Fugro Survey A/S Bergen, Norway

(Libyan Branch Office) Tripoli, Libya ProFocus Systems A/S Bergen, Norway

UAB ‘Fugro Baltic’ Vilnius, Lithuania Fugro Geotechnics A/S Oslo, Norway

Fugro Eco Consult S.a.r.l. Munsbach, Luxembourg Fugro Multi Client Services A/S Oslo, Norway

Fugro (Macau) Limitada Engenharia Fugro Norway A/S Oslo, Norway

Geotecnica Macau Macau, Macau Fugro Seastar A/S Oslo, Norway

Fugro Technical Services (Macau) Ltd. Macau, Macau Fugro Seismic Imaging A/S Oslo, Norway

Fugro Geodetic (Malaysia) Sdn Bhd. 30% Kuala Lumpur, Malaysia Fugro Norway Marine Services A/S Oslo, Norway

Fugro Geosciences (Malaysia) Sdn Bhd. 30% Kuala Lumpur, Malaysia Fugro-Geoteam A/S Oslo, Norway

Fugro-Jason (M) Sdn. Bhd. 40% Kuala Lumpur, Malaysia Fugro Interaction A/S Stavanger, Norway

Fugro Airborne Surveys Ltd. Quatre-Bornes, Mauritius Fugro Oceanor A/S Trondheim, Norway

Fugro Seastar Mauritius Ltd. Quatre-Bornes, Mauritius Fugro Geolab Nor A/S Trondheim, Norway

Fugro Survey Mauritius Ltd. Quatre-Bornes, Mauritius Fugro Middle East & Partners LLC Muscat, Oman

Fugro-Chance de Mexico S.A. de C.V. Ciudad Del Carmen, Campeche, Mexico Aerial Survey Consultants Muscat, Oman

Fugro Survey Mexico S.A. de C.V. Ciudad Del Carmen, Campeche, Mexico Fugro Geodetic Ltd. Karachi, Pakistan

Geomundo S.A. de C.V. Ciudad Del Carmen, Campeche, Mexico Fugro Panama SA Panama City, Panama

Fugro C.I.S. B.V. Leidschendam, The Netherlands Fugro Peninsular Geotechnical Services Doha, Qatar

Fugro Data Solutions B.V. Leidschendam, The Netherlands Fugro Engineering LLP Moscow, Russia

Fugro Ecoplan B.V. Leidschendam, The Netherlands Fugro Geosciences GmbH branch Moscow, Russia

Fugro-Elbocon B.V. Leidschendam, The Netherlands Electro Magnetic Marine Exploration

Fugro Engineers B.V. Leidschendam, The Netherlands Technologies (EMMET) ZAO Moscow, Russia

Fugro Ingenieursbureau B.V. Leidschendam, The Netherlands Geo Inzh Services LLP Moscow, Russia

Fugro Intersite B.V. Leidschendam, The Netherlands Fugro-Geostatika Co Ltd. St. Petersburg, Russia

Fugro-Jason Netherlands B.V. Leidschendam, The Netherlands Fugro-Suhaimi Ltd. 50% Dammam, Saudi Arabia

Fugro Marine Services B.V. Leidschendam, The Netherlands Decca Survey Saudi Arabia Ltd. Dammam, Saudi Arabia

Fugro Nederland B.V. Leidschendam, The Netherlands MAPS KSA Riyadh, Saudi Arabia

Fugro Robertson B.V. Leidschendam, The Netherlands Fugro Loadtest Asia Pte Ltd. Singapore, Singapore

Fugro South America B.V. Leidschendam, The Netherlands Fugro OmniSTAR Pte Ltd. Singapore, Singapore

Fugro Survey B.V. Leidschendam, The Netherlands Fugro Singapore Pte Ltd. Singapore, Singapore

Fugro Vastgoed B.V. Leidschendam, The Netherlands Fugro Survey Pte Ltd. Singapore, Singapore

Fugro-Inpark B.V. Leidschendam, The Netherlands Fugro Subsea Services Pte Ltd. Singapore, Singapore

Fugro Aerial Mapping B.V. Leidschendam, The Netherlands Fugro Subsea Technologies Pte Ltd. Singapore, Singapore

Inpark Detacheringen B.V. Leidschendam, The Netherlands Fugro-GEOS Pte Ltd. Singapore, Singapore

OmniSTAR B.V. Leidschendam, The Netherlands Fugro Survey Africa (Pty) Ltd. Cape Town, South Africa

Fugro Airborne Surveys N.V. Curaçao, Netherlands Antilles OmniSTAR (Pty) Ltd. Cape Town, South Africa

Fugro Cable N.V. Curaçao, Netherlands Antilles Fugro Maps South Africa (Pty) Ltd. Cape Town, South Africa

Fugro Jacques N.V. 70% Curaçao, Netherlands Antilles Fugro Airborne Surveys (Pty) Ltd. Johannesburg, South Africa

Fugro Robertson Americas N.V. Curaçao, Netherlands Antilles Fugro Data Services AG Zug, Switzerland

Fugro Satellite Services N.V. Curaçao, Netherlands Antilles Fugro Finance AG Zug, Switzerland

Fugro Survey Caribbean N.V. Curaçao, Netherlands Antilles Fugro Geodetic AG Zug, Switzerland

Fugro Consultants International N.V. Curaçao, Netherlands Antilles Fugro Geosciences GmbH Zug, Switzerland

Fugro BTW Ltd. New Plymouth, New Zealand Fugro International Holding A.G. Zug, Switzerland

Fugro Survey (Nigeria) Ltd. Port Harcourt, Nigeria Fugro South America GmbH Zug, Switzerland

Fugro Nigeria Ltd. Port Harcourt, Nigeria Fugro Survey GmbH Zug, Switzerland

Fugro Survey Caribbean Inc. Chaguaramas, Trinidad and Tobago

Fugro Geoscience Middle East Abu Dhabi, United Arab Emirates

Fugro Survey (Middle East) Ltd. Abu Dhabi, United Arab Emirates

Fugro Middle East B.V. Dubai, United Arab Emirates

Fugro-MAPS (UAE) Sharjah, United Arab Emirates

146 Company % Office, Country

Fugro-Rovtech Ltd. Aberdeen, United Kingdom

Fugro Survey Ltd. Aberdeen, United Kingdom

Fugro Well Services Ltd. Aberdeen, United Kingdom

Fugro-ImpROV Ltd. Aberdeen, United Kingdom

Fugro Aperio Ltd. Cambridge, United Kingdom

Fugro BKS Ltd. Coleraine, United Kingdom

Fugro Data Solutions Ltd. Conwy, United Kingdom

Fugro NPA Ltd. Edenbridge, United Kingdom

Fugro Seacore Ltd. Falmouth, United Kingdom

Fugro Alluvial Offshore Ltd. Great Yarmouth, United Kingdom

Fugro-Robertson Ltd. Llandudno, United Kingdom

Fugro Loadtest Ltd. Middlesex, United Kingdom

Fugro General Robotics Ltd. Milton Keynes, United Kingdom

Fugro Seismic Imaging Ltd. Swanley, United Kingdom

Fugro Multi Client Services (UK) Ltd. Wallingford, United Kingdom

Fugro GeoConsulting Ltd. Wallingford, United Kingdom

Fugro Airborne Surveys Ltd. Wallingford, United Kingdom

Fugro Engineering Services Ltd. Wallingford, United Kingdom

Fugro-GEOS Ltd. Wallingford, United Kingdom

Fugro Holdings (UK) Ltd. Wallingford, United Kingdom

Fugro-Jason (UK) Ltd. Wallingford, United Kingdom

Fugro LADS, Inc. Biloxi, United States

Fugro EarthData, Inc. Frederick, United States

LoadTest, Inc. Gainesville, United States

Fugro (USA), Inc. Houston, United States

Fugro Data Solutions, Inc. Houston, United States

Fugro Geoteam, Inc. Houston, United States

Fugro GeoServices, Inc. Houston, United States

Fugro Multi Client Services, Inc. Houston, United States

Fugro GeoConsulting, Inc. Houston, United States

Fugro Consultants, Inc. Houston, United States

Fugro, Inc. Houston, United States

Fugro-GEOS, Inc. Houston, United States

Fugro-ImpROV, Inc. Houston, United States

Fugro-Jason, Inc. Houston, United States

Fugro-McClelland Marine Geosciences, Inc. Houston, United States

Fugro Gravity & Magnetic Services, Inc. Houston, United States

Fugro Seismic Imaging, Inc. Houston, United States

OmniSTAR, Inc. Houston, United States

John Chance Land Surveys, Inc. Lafayette, United States

Fugro Chance, Inc. Lafayette, United States

Fugro Horizons, Inc. Rapid City, United States

Fugro Roadware, Inc. Richmond, United States

Fugro Pelagos, Inc. San Diego, United States

Fugro West, Inc. Ventura, United States

Fugro William Lettis & Associates, Inc. Walnut Creek, United States

Fugro Geotechnics Vietnam LLC Ho Chi Minh City, Vietnam

Fugro Annual accounts 2009 147 7 Company balance sheet As at 31 December, before profit appropriation

(EUR x 1,000) 2009 2008

Assets (9.1) Intangible assets 70,538 70,538 (9.2) Tangible fixed assets 117 202 (9.3) Financial fixed assets 1,408,522 1,115,663 Deferred tax assets – 1,890

Total fixed assets 1,479,177 1,188,293

(9.4) Trade and other receivables 28,550 32,384

Total current assets 28,550 32,384

Total assets 1,507,727 1,220,677

Equity Share capital 3,939 3,830 Share premium 431,441 431,441 Reserves 488,941 209,646 Unappropriated result 263,410 283,412

(9.5) Total equity 1,187,731 928,329

Provisions (9.6) Provisions 5,000 5,000 Deferred tax liabilities 1,140 –

Liabilities (9.7) Loans and borrowings 175,303 104,718

Total non-current liabilities 181,443 109,718

Bank overdraft 109,954 161,885 (9.8) Trade and other payables 12,610 13,210 Other taxes and social security charges 3,243 1,371 Income tax payable 12,746 6,164

Total current liabilities 138,553 182,630

Total liabilities 319,996 292,348

Total equity and liabilities 1,507,727 1,220,677

148 8 Company income statement For the year ended 31 December

(EUR x 1,000) 2009 2008

Share in results from participating interests, after taxation 265,495 296,107 Other results after taxation (2,085) (12,695)

Net result 263,410 283,412

Other results concern the costs of the Company less reimbursements from subsidiaries.

Fugro Annual accounts 2009 149 9 Notes to the company financial statements

General The Company financial statements are part of the 2009 financial statements of Fugro N.V. (the ‘Company’).

With reference to the Company income statement of Fugro N.V., use has been made of the exemption pursuant to Section 402 of Book 2 of the Netherlands Civil Code.

Accounting policies For setting the principles for the recognition and measurement of assets and liabilities and determination of the result for its company financial statements, Fugro N.V. makes use of the option provided in section 2:362 (8) of the Netherlands Civil Code. This means that the principles for the recognition and measurement of assets and liabilities and determination of the result (hereinafter referred to as principles for recognition and measurement) of the company financial statements of Fugro N.V. are the same as those applied for the consolidated EU-IFRS financial statements. Participating interests, over which significant influence is exercised, are stated on the basis of the equity method. These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil Code. Please see pages 87 to 102 for a description of these principles. The share in the result of participating interests consists of the share of Fugro N.V. in the result of these participating interests. Results on transactions, where the transfer of assets and liabilities between Fugro N.V. and its participating interests and mutually between participating interests themselves are not incorporated as far as they can be deemed to be unrealised.

9.1 Intangible assets (EUR x 1,000) 2009 2008

Cost Balance at 1 January 70,538 70,538

Balance at 31 December 70,538 70,538

Carrying amount At 1 January 70,538 70,538

At 31 December 70,538 70,538

The capitalised goodwill is not systematically amortised. Goodwill is tested for impairment annually, or when there is an indication for impairment. Goodwill represents amounts arising on acquisition of subsidiaries. No impairment has been recognised.

150 9.2 Tangible fixed assets 2009 2008 (EUR x 1,000) Other Other

Cost Balance at 1 January 1,454 2,310 Other investments 27 156 Disposals (17) (1,012)

Balance at 31 December 1,464 1,454

Depreciation Balance at 1 January 1,252 1,987 Depreciation 112 125 Disposals (17) (860)

Balance at 31 December 1,347 1,252

Carrying amount At 1 January 202 323

At 31 December 117 202

9.3 Financial fixed assets (EUR x 1,000) 2009 2008

Subsidiaries 1,344,226 1,064,734 Investments in equity accounted investees – 40 Long-term loans 64,296 50,889

1,408,522 1,115,663

9.3.1 Subsidiaries (EUR x 1,000) 2009 2008

Balance at 1 January 1,064,734 875,223 Share in result of participating interests 265,495 296,107 Capital increase – 18 Dividends (20,494) (25,504) Currency exchange differences 47,670 (52,778) Other (13,179) (28,332)

Balance 31 December 1,344,226 1,064,734

Fugro Annual accounts 2009 151 9.3.2 Investments in equity accounted investees (EUR x 1,000) 2009 2008

Balance at 1 January 40 130 Divestments (40) (90)

Balance at 31 December – 40

9.3.3 Long-term loans (EUR x 1,000) 2009 2008

Balance at 1 January 50,889 18,776 Loans provided 41,020 29,830 Redemptions (29,390) (292) Currency exchange differences 1,777 2,575

Balance 31 December 64,296 50,889

This concerns loans to subsidiaries at 0.7% (2008: 4%) interest. In principle these loans will be repaid within two years.

9.4 Trade and other receivables (EUR x 1,000) 2009 2008

Receivables from Group companies 21,758 31,929 Other taxes and social security charges 4,804 – Other receivables 1,988 455

Balance 31 December 28,550 32,384

9.5 Equity The equity movement schedule is included in chapter 3 of the consolidated financial statements. For the notes to the equity reference is made to note 5.44 of the consolidated financial statements. The Translation reserve and Hedging reserve qualify as a legal reserve (‘wettelijke reserve’) in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

9.6 Provisions For the notes on provisions reference is made to note 5.48 of the consolidated financial statements.

9.7 Loans and borrowings (EUR x 1,000) 2009 2008

Private Placement loans 102,376 104,718 Long-term loans 72,927 –

Balance at 31 December 175,303 104,718

For the notes on Private Placement loans reference is made to note 5.46.2 and 5.46.3 of the consolidated financial statements. The long-term loans are from subsidiaries. In principle, these loans will be repaid within two years. The average interest on loans and borrowings amounts to 4.1% per annum (2008: 6.9%). 152 9.8 Trade and other payables (EUR x 1,000) 2009 2008

Trade payables 1,869 801 Interest Private Placement loans 1,024 1,048 Non-trade payables and accrued expenses 9,717 11,361

Balance 31 December 12,610 13,210

9.9 Commitments not included in the balance sheet Tax unit Fugro N.V. and the Dutch operating companies form a fiscal unit for corporate tax. Each of the operating companies is severally liable for tax to be paid by all companies that belong to the fiscal unit.

9.10 Guarantees In principle the Company does not provide parent company guarantees to its subsidiaries, unless significant commercial reasons exist. The Company has deposited declarations of joint and several liability for a number of subsidiaries at the Chambers of Commerce. The Company has deposited a list with the Chamber of Commerce, which includes all financial interests of the Group in subsidiaries as well as a reference to each subsidiary for which such a declaration of liability has been deposited. At 31 December 2009 and at 31 December 2008 no significant guarantees were outstanding.

9.11 Contingencies For the notes to contingencies reference is made to note 5.56.3 of the consolidated financial statements.

9.12 R e l a t e d p a r t i e s For the notes to related parties, reference is made to note 5.58 of the consolidated financial statements.

9.13 Audit fees With reference to Section 2:382a of the Netherlands Civil Code, the following fees for the financial year have been charged by KPMG to the Company and its subsidiaries:

(EUR x 1,000) 2009 2008

KPMG Other KPMG Other Acoun- KPMG Total Acoun- KPMG Total tants N.V. network KPMG tants N.V. network KPMG

Statutory audit of annual accounts 692 1,518 2,210 772 1,251 2,023 Other assurance services 112 227 339 – – – Tax advisory services – 66 66 – 154 154 Other non-audit services 10 – 10 92 159 251

Total 814 1,811 2,625 864 1,564 2,428

In 2009 the audit fees under the category ‘statutory audit of annual accounts’, include an amount of EUR 306 thousand for the audit of the 2008 statutory financial statements of subsidiaries.

Fugro Annual accounts 2009 153 Audit and (non-)audit related fees for the respective years are charged to the income statement on an accrual basis.

The most important task of the external auditor is the audit of the financial statements of Fugro N.V. Furthermore, the auditor assists with due diligence processes and financial statements related audit work within the Group. Tax advice is in principle given by specialist firms or specialised departments of local audit firms, which hardly ever are involved in the audit of the annual accounts of the relevant subsidiary. Other than these advisory services, the Company makes only limited use of external advisors. In the case that such services are required, specialists are engaged that are not associated with the external auditor.

The fees paid for the above mentioned services, which are included in profit or loss of the consolidated financial statements in the line other expenses, are evaluated on a regular basis and in line with the market.

The members of the Supervisory Board have signed the financial statements pursuant to their statutory obligations under article 2:101 sub 2 Netherlands Civil Code.

The members of the Board of Management have signed the financial statements pursuant to their statutory obligations under article 2:101 sub 2 Netherlands Civil Code and article 5:25c sub 2 (c) Financial Markets Supervison Act.

Leidschendam, 4 March 2010

Board of Management Supervisory Board K.S. Wester, President and Chief Executive Officer F.H. Schreve, Chairman A. Jonkman, Chief Financial Officer F.J.G.M. Cremers, Vice-chairman P. van Riel J.A. Colligan J. Rüegg M. Helmes A. Steenbakker G-J. Kramer Th. Smith

154 10 Other information

10.1 Auditor’s report statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal To: the Supervisory Board and Shareholders of Fugro N.V. control relevant to the entity’s preparation and fair presentation of the financial statements in order to Report on the financial statements design audit procedures that are appropriate in the We have audited the accompanying financial statements circumstances, but not for the purpose of expressing 2009 of Fugro N.V., Leidschendam as set out on pages 80 to an opinion on the effectiveness of the entity’s internal 154. The financial statements consist of the consolidated control. An audit also includes evaluating the financial statements and the company financial appropriateness of accounting policies used and the statements. The consolidated financial statements reasonableness of accounting estimates made by comprise the consolidated statement of financial position management, as well as evaluating the overall as at 31 December 2009, the consolidated statements of presentation of the financial statements. comprehensive income, changes in equity and cash flows for the year then ended, and the notes, comprising a We believe that the audit evidence we have obtained is summary of significant accounting policies and other sufficient and appropriate to provide a basis for our audit explanatory information. The company financial opinion. statements comprise the company balance sheet as at 31 December 2009, the company income statement for Opinion with respect to the consolidated financial the year then ended and the notes. statements In our opinion, the consolidated financial statements give Management’s responsibility a true and fair view of the financial position of Fugro N.V. Management is responsible for the preparation and fair as at 31 December 2009, and of its result and its cash flows presentation of the financial statements in accordance for the year then ended in accordance with International with International Financial Reporting Standards as Financial Reporting Standards as adopted by the adopted by the European Union and with Part 9 of Book 2 European Union and with Part 9 of Book 2 of the of the Netherlands Civil Code, and for the preparation of Netherlands Civil Code. the Report of the Board of management in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This Opinion with respect to the company financial responsibility includes: designing, implementing and statements maintaining internal control relevant to the preparation In our opinion, the company financial statements give a and fair presentation of the financial statements that are true and fair view of the financial position of Fugro N.V. free from material misstatement, whether due to fraud or as at 31 December 2009, and of its result for the year then error; selecting and applying appropriate accounting ended in accordance with Part 9 of Book 2 of the policies; and making accounting estimates that are Netherlands Civil Code. reasonable in the circumstances. Report on other legal requirements Auditor’s responsibility Pursuant to the legal requirement under 2:393 sub 5 part f Our responsibility is to express an opinion on the of the Netherlands Civil Code, we report, to the extent of financial statements based on our audit. We conducted our competence, that the Report of the Board of our audit in accordance with Dutch law. This law requires Management is consistent with the financial statements that we comply with ethical requirements and plan and as required by 2:391 sub 4 of the Netherlands Civil Code. perform the audit to obtain reasonable assurance whether the financial statements are free from material Rotterdam, 4 March 2010 misstatement. KPMG Accountants N.V. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the H. Heijnraets RA financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial

Fugro Annual accounts 2009 155 10.2 Subsequent events 10.4 Profit appropriation Reference is made to note 5.57. Article 36 of the articles of association of Fugro N.V. runs as follows (as far as relevant): 10.3 Foundation Boards 36.2 a. The profit shall, if sufficient, be applied first Stichting Administratiekantoor Fugro in payment to the holders of white-knight The Board of Stichting Administratiekantoor Fugro (‘Trust preference shares of a percentage as specified Office’), Leidschendam, The Netherlands, is composed as below of the compulsory amount paid on these follows: shares as at the commencement of the financial year for which the distribution is made. name function term b. The percentage referred to above in R. van der Vlist, Chairman Board member 2012 subparagraph a. shall be equal to the average of L.P.E.M. van den Boom Board member 2009 the Euribor interest charged for loans with a J.F. van Duyne Board member 2011 term of one year – weighted by the number of days for which this interest was applicable All Board members are independent of Fugro. – during the financial year for which the distribution is made, increased by at most four Stichting Beschermingspreferente Aandelen Fugro percentage points; this increase shall each time The Board of Stichting Beschermingspreferente Aandelen be fixed by the Board of Management for a Fugro, Leidschendam, The Netherlands, is composed as period of five years, after approval by the follows: Supervisory Board. 36.3 a. Next, if possible, a dividend shall be paid on the name function term financing preference shares of each series and M.W. den Boogert, Chairman Board member B 2010 on the convertible financing preference shares J.V.M. Commandeur Board member B 2012 of each series, equal to a percentage calculated J.C. de Mos Board member B 2009 on the amount effectively paid on the financing P.H. Vogtländer Board member B 2011 preference shares of the respective series and F.H. Schreve Board member A 2010 the convertible financing preference shares of the respective series, including a share All Board members, with the exception of Mr. F.H. Schreve, premium, if any, upon the first issue of the are independent of Fugro. Mr. Schreve is Chairman of the series in question, and which percentage shall Supervisory Board of Fugro N.V. be related to the average effective return on ‘state loans general with a term of 7 – 8 years’, Stichting Continuïteit Fugro calculated and determined in the manner as The Board of Stichting Continuïteit Fugro, Curaçao, described hereinafter. Netherlands Antilles, is composed as follows: b. The percentage of the dividend for the financing preference shares of each or for the convertible name function term financing preference shares of each series, as M.A. Pourier, Chairman Board member B 2010 the case may be, shall be calculated by taking A.C.M. Goede Board member B 2009 the arithmetic mean of the average effective R. de Paus Board member B 2011 return on the aforesaid loans, as prepared by M. van de Plank Board member B 2010 the Central Bureau of Statistics (Centraal F.H. Schreve Board member inde- Bureau voor de Statistiek) and published in the finitely* Official List of Euronext Amsterdam for the last * In capacity as a member of the Supervisory Board of Fugro N.V. five stock market trading days preceding the day of the first issue of financing preference shares All Board members, with the exception of Mr. F.H. Schreve, of the respective series or the convertible are independent of Fugro. Mr. Schreve is Chairman of the financing preference shares of the respective Supervisory Board of Fugro N.V. series, as the case may be, or preceding the day on which the dividend percentage is adjusted, increased or decreased, if applicable, by a

156 mark-up or mark-down set by the Board of 10.5 Proposed profit appropriation Management upon issue and approved by the In accordance with article 36 of the articles of Supervisory Board of at two percentage points, association, the Board of Management proposes a depending on the market conditions then dividend of EUR 116.3 million be paid out in the form of obtaining, which mark-up or mark-down may a cash payment of EUR 1.50 per (certificate of an) ordinary differ for each series. share with a nominal value of EUR 0.05 or in the form 36.4 In the event that in any financial year the profit of (certificates of) ordinary shares with a nominal value is insufficient to make the distributions of EUR 0.05 charged to the reserves. referred to in Paragraph 3 of this article, the provisions contained in Paragraph 3 shall only be applied in subsequent financial years after the deficit has been made good and after the provisions contained in Paragraph 3 have been applied. The Board of Management shall be authorised, subject to the approval of the Supervisory Board, to resolve to distribute an amount equal to the deficit referred to in the previous sentence from the reserves, with the exception of the reserves formed by way of a share premium on the issue of financing preference shares, respectively convertible financing preference shares. 36.5 In the event that the first issue of financing preference shares, respectively convertible financing preference shares of a series, takes place during the course of a financial year, the dividend on the relevant series of financing preference shares, respectively the convertible financing preference shares, will be proportionately decreased to the first day of issue. 36.6 After application of the provisions contained in Paragraphs 2 to 5 inclusive, no further dividend distributions shall be made on the protective preference shares or the financing preference shares, respectively the convertible financing preference shares. 36.7 From the profit remaining after application of the provisions contained in Paragraphs 2 to 5 inclusive, the Board of Management – subject to the approval of the Supervisory Board – shall make such reservations as the Board of Management deems necessary. To the extent that the profit is not reserved by application of the previous sentence, it shall be at the disposal of the General Meeting either to be wholly or partially reserved or to be wholly or partially distributed to holders of ordinary shares in proportion to the number of ordinary shares they hold.

Fugro Annual accounts 2009 157 Report of Stichting Administratiekantoor Trust Office. This opportunity was taken by 394 holders of Fugro (‘Trust Office’) certificates holding 20,337,895 certificates with respect to the annual general meeting and by 256 holders of In accordance with article 19 of the conditions of certificates holding 22,191,799 certificates with respect administration with respect to the ordinary registered to the extraordinary general meeting. shares Fugro N.V., the undersigned issues the following report to the holders of certificates of ordinary shares In accordance with the roster, on 30 June 2009 Mr. Van Fugro N.V. den Boom stepped down as a member of the Trust Office’s Board. The Trust Office’s previous report stated that, in To our regret Mr. W. Schatborn passed away at the accordance with article 4.3 of the articles of association, beginning of 2010. Mr. Schatborn was a member of the the Board offered holders of certificates who represented Board of the Trust Office for more than six years. at least 15% of the issued certificates the opportunity to We are very grateful to him for his expert and valuable request, until 3 April 2009, that the Board convenes a contribution to the Board and his intense commitment meeting of holders of certificates in order to recommend to the Trust Office. a candidate to the Trust Office’s Board. As no request for a meeting of holders of certificates was submitted, during During the 2009 reporting year all the Trust Office’s its meeting of 8 April 2009 the Board, in accordance with activities were related to the administration of ordinary its announced intention, reappointed Mr. Van den Boom shares against which certificates have been issued. as a member of the Board for a period of four years commencing 1 July 2009. During 2009 the Board met twice. The meeting of 8 April 2009 was dedicated mainly to the preparations for the Because of the death of Mr. Schatborn, the Board annual general meeting of Fugro N.V. (the ‘Company’) on temporarily comprises three persons. The Board intends 7 May 2009. The meeting of 16 September 2009, after the to appoint a fourth member to the Board for a maximum publication of the Company’s half-yearly results, was on period of four years in its meeting on 1 April 2010. the one hand dedicated to general business developments The Board intends to appoint Mr. J.A.W.M. van Rooijen. and on the other hand to the extraordinary general Mr. Van Rooijen (65) was, amongst others, Chairman of meeting, to be held the same day. corporate governance KPMG Corporate finance N.V. and member (CFO) of within the Company and the Trust Office was also the Board of Management of KPMG Holding N.V. discussed. Mr. Van Rooijen retired from KPMG on 1 June 2005.

All the Trust Office’s Board members are independent of In accordance with article 4.3 of the articles of the Company. The Board may offer holders of certificates association, the Board offers holders of certificates who the opportunity to recommend candidates for represent at least 15% of the issued certificates the appointment to the Board. Further regulations related to opportunity to request, until 1 April 2010, that the Board the holding of a meeting of holders of certificates have convenes a meeting of holders of certificates in order to been drawn-up. The Trust Office is authorised to accept recommend a candidate to the Trust Office’s Board. voting instructions from holders of certificates and to cast The request should be submitted in writing and should these votes during a general meeting of the Company. state the name and address of the recommended candidate. All members of the Board attended the annual general meeting of the Company held on 7 May 2009 and two At present the Board of the Trust Office comprises: members of the Board attended the extraordinary general 1 R. van der Vlist, Chairman meeting held on 16 September 2009. In these meetings 2 L.P.E.M. van den Boom the Trust Office represented respectively 64% and 62.8% of 3 J.F. van Duyne the votes cast. The Trust Office voted in favour of all the proposals submitted to these meetings. In accordance with the terms of administration, holders of certificates were offered the opportunity to vote, in accordance with their own opinion, as authorised representatives of the

158 Mr. Van der Vlist was General Secretary of N.V. Koninklijke Nederlandsche Petroleum Maatschappij. Mr. Van den Boom was a member of the Board of Management of NIB Capital Bank N.V. and he is a Senior Partner of PARK Corporate Finance. Mr. Van Duyne was Chairman of the Board of Management of Koninklijke Hoogovens N.V. and afterwards joint Chief Executive Officer of Corus Group PLC.

In 2009 the total remuneration of the members of the Board amounted to EUR 31,000 and the total costs of the Trust Office amounted to EUR 128,749.

On 31 December 2009 71,760,667 registered ordinary shares with a nominal value of EUR 0.05 were in administration against which 71,760,667 certificates of ordinary shares with a nominal value of EUR 0.05 had been issued. During the financial year 188,423 certificates were exchanged into ordinary shares and 22,296 ordinary shares were exchanged into certificates. 1,848,364 certificates of ordinary shares were issued as a result of the stock dividend.

The activities related to the administration of the shares are carried out by the administrator of the Trust Office, Administratiekantoor van het Algemeen Administratie en Trustkantoor B.V. in Amsterdam, The Netherlands.

The Trust Office’s address is: Veurse Achterweg 10, 2264 SG Leidschendam, The Netherlands.

Leidschendam, 4 March 2010

The Board

Fugro Annual accounts 2009 159 Historic review Dutch Dutch Dutch Dutch Dutch Dutch Dutch Dutch Dutch IFRS IFRS IFRS IFRS IFRS IFRS IFRS GAAP GAAP GAAP GAAP GAAP GAAP GAAP GAAP GAAP 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994

Income and expenses (x EUR 1,000) Revenue 2,052,988 2,154,474 1,802,730 1,434,319 1,160,615 1,008,008 822,372 945,899 909,817 712,934 546,760 578,207 482,096 375,276 296,636 300,130 Third party costs 624,413 722,321 604,855 503,096 405,701 364,644 273,372 328,401 331,685 250,132 176,067 197,258 172,346 123,337 99,378 100,104 Net revenue own services (revenue less third party costs) 1,428,575 1,432,153 1,197,875 931,223 754,914 643,364 549,000 617,498 578,132 462,765 370,648 380,948 309,750 251,939 197,258 200,026 Results from operating activities (EBIT) 2) 367,422 385,732 324,813 211,567 144,070 104,236 63,272 111,873 98,470 73,697 61,805 61,669 46,195 25,911 12,434 21,146 EBITDA 551,130 535,178 439,590 295,948 218,833 177,453 124,056 158,814 142,039 113,269 98,334 97,926 75,781 49,371 32,037 40,840 Cash flow 456,773 438,902 337,106 226,130 176,093 125,802 80,480 119,161 105,301 85,596 77,233 74,057 60,670 39,479 26,773 33,625 Net result 2) 263,410 283,412 216,213 141,011 99,412 49,317 18,872 72,220 61,732 46,024 40,704 37,800 31,084 16,018 7,170 13,931 of which non-recurring items – – – – – – – – – – – – 3,630 – (4,538) –

Balance sheet (x EUR 1,000) Property, plant and equipment 1,043,227 859,088 599,298 412,232 262,759 232,956 268,801 192,293 163,298 120,526 114,035 108,181 93,479 68,521 64,800 65,254 Investments 330,244 337,469 299,699 203,944 90,414 71,028 123,983 100,036 89,352 49,008 37,301 61,487 58,220 27,000 24,776 39,434 of which in acquisitions 9,882 14,423 8,666 21,041 10,057 2,296 70,888 24,852 11,196 3,686 9,257 6,081 5,763 1,724 3,222 11,662 Depreciation of property, plant and equipment 173,593 140,429 107,684 78,169 69,445 66,139 54,004 46,941 43,569 39,572 36,529 36,257 29,586 23,460 19,603 19,694 Net current assets 1) 140,301 56,060 171,347 150,733 222,485 (95,348) 114,852 129,071 (50,514) 92,269 15,066 7,170 6,308 11,571 9,121 23,733 Total assets 2,366,317 2,123,306 1,700,130 1,405,698 1,138,660 983,350 1,056,003 793,245 814,772 474,741 380,495 338,021 289,512 216,272 170,122 176,702 Provisions 6,240 13,155 16,278 13,888 398 1,075 584 12,706 8,056 6,746 10,573 8,894 7,805 4,447 2,723 2,450 Loans and borrowings 441,339 395,384 449,957 341,997 300,753 184,268 431,895 273,520 121,450 120,713 23,234 24,368 17,153 18,741 23,823 30,449 Equity attributable to owners of the company 1) 1,187,731 928,329 699,989 562,417 465,460 223,913 211,196 271,698 244,660 101,453 107,909 90,575 77,370 61,260 51,050 58,402

Key ratios (in %) 2) Results from operating activities (EBIT)/revenue 17.9 17.9 18.0 14.8 12.9 10.3 9.2 11.8 10.8 10.3 11.3 10.7 9.6 6.9 4.2 7.0 Profit/revenue 12.8 13.2 12.0 9.8 8.6 4.9 2.3 7.6 6.8 6.5 7.4 6.5 6.4 4.3 2.4 4.6 Profit/net revenue own services 18.4 19.8 18.0 15.1 13.2 7.7 8.3 11.7 10.7 9.9 11.0 9.9 10.0 6.4 3.6 7.0 Profit/capital and reserves 1) 24.9 34.8 34.3 27.4 28.8 22.7 17.6 27.4 35.7 45.4 41.0 45.0 44.8 28.5 13.1 23.1 Total equity/total assets 1) 50.7 44.1 41.6 40.2 41.3 23.2 20.2 34.6 30.4 22.1 29.3 27.9 27.7 28.9 30.4 33.8 Interest cover 47.8 13.9 13.1 10.9 7.2 3.7 2.2 6.1 7.8 8.1 13.1 12.1 10.4 – – –

Data per share (x EUR 1.–) 2) 4) Equity attributable to owners of the Company 1) 15.08 12.12 9.94 8.08 6.76 3.60 3.48 4.57 4.17 2.10 2.29 1.91 1.65 1.36 1.11 1.39 Results from operating activities (EBIT) 3) 4.82 5.29 4.67 3.08 2.18 1.76 1.09 1.95 1.86 1.48 1.27 1.30 0.98 0.58 0.27 0.50 Cash flow 3) 5.99 6.01 4.84 3.29 2.67 2.12 1.39 2.08 1.98 1.72 1.59 1.56 1.29 0.88 0.58 0.80 Net result 3) 3.46 3.88 3.11 2.05 1.51 0.83 0.33 1.26 1.16 0.92 0.84 0.80 0.66 0.36 0.16 0.33 Dividend paid in year under review 1.50 1.25 0.83 0.60 0.48 0.48 0.46 0.46 0.40 0.34 0.31 0.28 0.25 0.17 0.08 0.17

Share price (x EUR 1.–) 4) Year-end share price 40.26 20.485 52.80 36.20 27.13 15.35 10.20 10.78 12.53 17.19 9.23 4.99 7.01 3.48 1.96 3.88 Highest share price 41.85 59.95 62.00 36.64 27.40 16.41 12.86 16.50 18.91 17.81 9.98 10.99 8.28 3.71 4.14 4.75 Lowest share price 19.085 19.32 34.91 27.13 15.14 10.05 6.13 9.88 10.75 9.31 4.10 4.06 3.44 1.93 1.45 3.69

Number of employees At year-end 13,482 13,627 11,472 9,837 8,534 7,615 8,472 6,923 6,953 5,756 5,114 5,136 4,429 4,222 3,968 3,557

Shares in issue (x 1,000) 4) Of nominal EUR 0.05 at year-end 78,772 76,608 70,421 69,582 68,825 62,192 60,664 59,449 58,679 51,048 50,449 48,682 47,673 46,053 46,044 46,040

1) As of 2002 no accrued dividend has been incorporated.

2) For 2002 and earlier years, before amortisation of goodwill.

3) Unlike preceding years the figures as from the year 1999 have been calculated based upon the weighted average number of outstanding shares.

4) As a result of the share split (4:1) in 2005, the historical figures have been restated.

160 Dutch Dutch Dutch Dutch Dutch Dutch Dutch Dutch Dutch IFRS IFRS IFRS IFRS IFRS IFRS IFRS GAAP GAAP GAAP GAAP GAAP GAAP GAAP GAAP GAAP 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994

Income and expenses (x EUR 1,000) Revenue 2,052,988 2,154,474 1,802,730 1,434,319 1,160,615 1,008,008 822,372 945,899 909,817 712,934 546,760 578,207 482,096 375,276 296,636 300,130 Third party costs 624,413 722,321 604,855 503,096 405,701 364,644 273,372 328,401 331,685 250,132 176,067 197,258 172,346 123,337 99,378 100,104 Net revenue own services (revenue less third party costs) 1,428,575 1,432,153 1,197,875 931,223 754,914 643,364 549,000 617,498 578,132 462,765 370,648 380,948 309,750 251,939 197,258 200,026 Results from operating activities (EBIT) 2) 367,422 385,732 324,813 211,567 144,070 104,236 63,272 111,873 98,470 73,697 61,805 61,669 46,195 25,911 12,434 21,146 EBITDA 551,130 535,178 439,590 295,948 218,833 177,453 124,056 158,814 142,039 113,269 98,334 97,926 75,781 49,371 32,037 40,840 Cash flow 456,773 438,902 337,106 226,130 176,093 125,802 80,480 119,161 105,301 85,596 77,233 74,057 60,670 39,479 26,773 33,625 Net result 2) 263,410 283,412 216,213 141,011 99,412 49,317 18,872 72,220 61,732 46,024 40,704 37,800 31,084 16,018 7,170 13,931 of which non-recurring items – – – – – – – – – – – – 3,630 – (4,538) –

Balance sheet (x EUR 1,000) Property, plant and equipment 1,043,227 859,088 599,298 412,232 262,759 232,956 268,801 192,293 163,298 120,526 114,035 108,181 93,479 68,521 64,800 65,254 Investments 330,244 337,469 299,699 203,944 90,414 71,028 123,983 100,036 89,352 49,008 37,301 61,487 58,220 27,000 24,776 39,434 of which in acquisitions 9,882 14,423 8,666 21,041 10,057 2,296 70,888 24,852 11,196 3,686 9,257 6,081 5,763 1,724 3,222 11,662 Depreciation of property, plant and equipment 173,593 140,429 107,684 78,169 69,445 66,139 54,004 46,941 43,569 39,572 36,529 36,257 29,586 23,460 19,603 19,694 Net current assets 1) 140,301 56,060 171,347 150,733 222,485 (95,348) 114,852 129,071 (50,514) 92,269 15,066 7,170 6,308 11,571 9,121 23,733 Total assets 2,366,317 2,123,306 1,700,130 1,405,698 1,138,660 983,350 1,056,003 793,245 814,772 474,741 380,495 338,021 289,512 216,272 170,122 176,702 Provisions 6,240 13,155 16,278 13,888 398 1,075 584 12,706 8,056 6,746 10,573 8,894 7,805 4,447 2,723 2,450 Loans and borrowings 441,339 395,384 449,957 341,997 300,753 184,268 431,895 273,520 121,450 120,713 23,234 24,368 17,153 18,741 23,823 30,449 Equity attributable to owners of the company 1) 1,187,731 928,329 699,989 562,417 465,460 223,913 211,196 271,698 244,660 101,453 107,909 90,575 77,370 61,260 51,050 58,402

Key ratios (in %) 2) Results from operating activities (EBIT)/revenue 17.9 17.9 18.0 14.8 12.9 10.3 9.2 11.8 10.8 10.3 11.3 10.7 9.6 6.9 4.2 7.0 Profit/revenue 12.8 13.2 12.0 9.8 8.6 4.9 2.3 7.6 6.8 6.5 7.4 6.5 6.4 4.3 2.4 4.6 Profit/net revenue own services 18.4 19.8 18.0 15.1 13.2 7.7 8.3 11.7 10.7 9.9 11.0 9.9 10.0 6.4 3.6 7.0 Profit/capital and reserves 1) 24.9 34.8 34.3 27.4 28.8 22.7 17.6 27.4 35.7 45.4 41.0 45.0 44.8 28.5 13.1 23.1 Total equity/total assets 1) 50.7 44.1 41.6 40.2 41.3 23.2 20.2 34.6 30.4 22.1 29.3 27.9 27.7 28.9 30.4 33.8 Interest cover 47.8 13.9 13.1 10.9 7.2 3.7 2.2 6.1 7.8 8.1 13.1 12.1 10.4 – – –

Data per share (x EUR 1.–) 2) 4) Equity attributable to owners of the Company 1) 15.08 12.12 9.94 8.08 6.76 3.60 3.48 4.57 4.17 2.10 2.29 1.91 1.65 1.36 1.11 1.39 Results from operating activities (EBIT) 3) 4.82 5.29 4.67 3.08 2.18 1.76 1.09 1.95 1.86 1.48 1.27 1.30 0.98 0.58 0.27 0.50 Cash flow 3) 5.99 6.01 4.84 3.29 2.67 2.12 1.39 2.08 1.98 1.72 1.59 1.56 1.29 0.88 0.58 0.80 Net result 3) 3.46 3.88 3.11 2.05 1.51 0.83 0.33 1.26 1.16 0.92 0.84 0.80 0.66 0.36 0.16 0.33 Dividend paid in year under review 1.50 1.25 0.83 0.60 0.48 0.48 0.46 0.46 0.40 0.34 0.31 0.28 0.25 0.17 0.08 0.17

Share price (x EUR 1.–) 4) Year-end share price 40.26 20.485 52.80 36.20 27.13 15.35 10.20 10.78 12.53 17.19 9.23 4.99 7.01 3.48 1.96 3.88 Highest share price 41.85 59.95 62.00 36.64 27.40 16.41 12.86 16.50 18.91 17.81 9.98 10.99 8.28 3.71 4.14 4.75 Lowest share price 19.085 19.32 34.91 27.13 15.14 10.05 6.13 9.88 10.75 9.31 4.10 4.06 3.44 1.93 1.45 3.69

Number of employees At year-end 13,482 13,627 11,472 9,837 8,534 7,615 8,472 6,923 6,953 5,756 5,114 5,136 4,429 4,222 3,968 3,557

Shares in issue (x 1,000) 4) Of nominal EUR 0.05 at year-end 78,772 76,608 70,421 69,582 68,825 62,192 60,664 59,449 58,679 51,048 50,449 48,682 47,673 46,053 46,044 46,040

1) As of 2002 no accrued dividend has been incorporated.

2) For 2002 and earlier years, before amortisation of goodwill.

3) Unlike preceding years the figures as from the year 1999 have been calculated based upon the weighted average number of outstanding shares.

4) As a result of the share split (4:1) in 2005, the historical figures have been restated.

Fugro Annual accounts 2009 161 Glossary

Technical terms Financial terms 2D Seismic: Acoustic measuring technology which uses single vessel-towed hydrophone Cash flow: The profit for the period attributable to equity holders of the company plus streamers. This technique generates a 2D cross-section of the deep seabed and is used depreciation, amortisation of intangible fixed assets and minority interest. primarily when initially reconnoitring for the presence of oil or gas reservoirs. Debt (on ‘Private Placement’ covenants): Long-term loans including obligations 3D Seismic: Acoustic measuring technology which uses multiple vessel-towed long arising from leasing agreements. hydrophone streamers. This technique generates a 3D model of the deep seabed and Dividend yield: Dividend as a percentage of the (average) share price. is used to locate and analyse oil and gas reservoirs. EBIT: Result from operating activities. AUV (Autonomous Underwater Vehicle): An unmanned submersible launched EBITDA: Result from operating activities before depreciation and amortisation. from a ‘mother-vessel’ but not connected to it via a cable. Propulsion and control are Gearing: Loans and borrowings plus bank overdraft minus cash and cash equivalents, autonomous and use pre-defined mission protocols. divided by shareholders equity. Construction Support: Offshore services related to the installation and construction Interest cover: Result from operating activities (EBIT) compared with the net interest of structures such as pipelines, drilling platforms and other oil and gas related charges. infrastructure, usually involving the use of ROVs. Invested capital: The capital made available to the Company, i.e. Group equity plus DGPS (Differential Global Positioning System): A GPS based positioning system the available loans and the balance of current account deposits/withdrawals. using territorial reference points to enhance accuracy. Net profit margin: profit as a percentage of Revenue. EM: Electromagnetic. Private Placement: Long-term financing (10 – 15 years), entered into in May 2002 via Fugro Pressure Corer (FPC): The FPC uses a water hammer, driven by the circulating a private placement with over twenty American and two British institutional investors. fluid pumped down the drill pipe, to drive the core barrel into the sediment. Return on invested capital: The profit (before profit appropriation) including Gas hydrates: mixture of semi-solid methane gas and water molecules that are created minority interest and interest charges as a percentage of the average invested capital. by water pressure and cold temperatures found deep in the ocean. Solvency: Shareholders’ equity as a percentage of the balance sheet total. Geophysics: The mapping of subterranean soil characteristics using non-invasive techniques such as sound. Geoscience: A range of scientific disciplines (geology, geophysics, petroleum engineering, bio stratification, geochemistry, etc.) related to the study of rocks, fossils and fluids. Geotechnics: The determination of subterranean soil characteristics using invasive techniques such as probing, drilling and sampling. Glonass: Global Navigation Satellite System. GPS: Global Positioning System. Gravity: Precision gravity measurements to detect geological and other anomalies. LiDAR: a measuring system based on laser technology that can make extremely accurate recordings from an aircraft. Multi client data: Data collected at own risk and expense and sold to several clients. ROV (Remotely Operated Vehicle): Unmanned submersible launched from a vessel and equipped with measuring and manipulation equipment. A cable to the mother- vessel provides power, video and data communication. Seismic: Acoustic measurement of seabed characteristics and stratification with the objective of detecting oil and gas. These measurements are conducted using specialised vessels equipped with powerful acoustic energy sources and long receiving streamers (hydrophones) to measure (sub) seabed acoustic echoes. Starfix: DGPS positioning system, specifically for use offshore. This system is intended for the professional user and, in addition to a high degree of accuracy, is equipped with a wide range of data analysis and quality control possibilities. Survey Services: Services related to the measurement, management and mapping of locations, objects and operations, most of which involve a substantial navigation and positioning component.

162 Colophon

Fugro N.V. Veurse Achterweg 10 2264 SG Leidschendam The Netherlands Telephone: +31 (0)70 3111422 Fax: +31 (0)70 3202703

Concept and realisation: C&F Report Amsterdam B.V.

Photography and images: Fugro N.V.

Fugro has endeavoured to fulfil all legal requirements related to copyright. Anyone who, despite this, is of the opinion that other copyright regulations could be applicable should contact Fugro.

This annual report is a translation of the official report published in the Dutch language.

This annual report is also available on www.fugro.com.

For complete information, see www.fugro.com.

Fugro N.V. Veurse Achterweg 10 P.O. Box 41 Cautionary Statement regarding Forward-Looking Statements 2260 AA Leidschendam This annual report may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including The Netherlands (but not limited to) statements expressing or implying Fugro N.V.’s beliefs, expectations, intentions, forecasts, estimates or predictions (and the Telephone: +31 (0)70 3111422 assumptions underlying them). Forward-looking statements necessarily involve risks and uncertainties. The actual future results and situations Fax: +31 (0)70 3202703 may therefore differ materially from those expressed or implied in any forward-looking statements. Such differences may be caused by various E-mail: [email protected] factors (including, but not limited to, developments in the oil and gas industry and related markets, currency risks and unexpected operational www.fugro.com setbacks). Any forward-looking statements contained in this annual report are based on information currently available to Fugro N.V.’s manage- Trade Register number 27120091 ment. Fugro N.V. assumes no obligation to make a public announcement in each case where there are changes in information related to, VAT number 00 56 21 409 B01 or if there are otherwise changes or developments in respect of, the forward-looking statements in this annual report. Annual Report 2009 Report Annual . n.v fugro

ANNUAL REPORT 2009 FUGRO N.V.